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■B   3b   662  MAR  26  1925 


LECTURES    ON 
FIRE  INSURANCE 

SEASONS   OF    1914- -1915 -1916 


v.. 


THEJINSURANCE  INSTITUTE 
OF  HARTFORD.  Incorporated 

NINETEEN  SEVENTEEN 


^Fire  Insurance  Lectures  delivered 
berore  tne  Insurance  Institute  or 
Hartford,  Inc.,  seasons  of  1914- IS- 
IS, tased  on  tke  second  and  tkird 
years  t)rograin  of  tne  Insurance 
Institute    of    America.     :      :      :      :      r 


HARTFORD.  CONNECTICUT 

Tne  Insurance  Institute  of  Hartford 
Incorf)orate<l 

i917 


THE  INSURANCE  INSTITUTE  OF  HARTFORD,  Inc. 

1914-15-1916 


CONTENTS 

PART  I  Page 

1914-15 

'Public  Water  Works,"  by  Geo.  W.  Bootk      ....  5 

'Public  Fire  Def)artments,"  by  Geo.  W^.  Bootk           .           .           .  20 

'W^ood workers,"  by  H.  E.  Burdette           .....  34 

'History  ana  Pnilosojf>ny  of  Fire  Insurance  Rating, 

Tke  Making  of  Rates,  by  Edward  R.  Hardy       .           .           .  46 

'Standard  Policy — Clauses  and  Forms,"  by  W^.  B.  Medlicott 

Fire  Insurance  Forms  and  Clauses       .....  70 

Forms  of  Prot)erty  Descrif)tion  and  Location         .           .           .  80 

Forms  for  otker  tkan  Direct  Fire  Loss          ....  92 

Forms  of  Extended  Area  .......  110 

r  ire  Insurance  Clauses        .           .           .           .           .           .           .  124 

Clauses  of  Exemt)tion  and  W^arrant,  etc.       ....  139 

Clauses  of  Distribution  and  of  Liability  Limitation       .           .  160 

PART  II 

1916 

'Fire  Hazards — Tanneries,     by  Benjamin  Rickards    ...  3 

Ckemical  Hazards,"  by  Milton  F.  Jones            ....  22 

'Correspondence,     by  R.  M.  Bissell            .....  33 

'Processes  and  Hazards  of  Metalworkers,"  by  Mmot  Blake          .  44 

Automatic  Sf)rinkler  Protection,"  by  F.  C.  Moore              .           .  56 

Automatic  St)rinkler  Protection,     Second  Paf)er         .           .           .  Z2 

'Tke  Analytic  System  for  tke   Measurement  of  Relative    Fire 

Hazard,"  by  Edward  R.  Hardy          .....  99 

'Agency  Organization  and  Management,"   by  W.  L.  Wakefield  110 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/fireinsurancelecOOinsurich 


Public  Water  Works 

BY 

GEO.  W.  BOOTH 

December  11,  1914 

This  subject  is,  as  you  all  realize,  a  broad  and  technical 
one.  I  shall  attempt,  in  the  short  time  available,  to  discuss 
briefly  only  those  features  which  have  a  more  or  less  direct 
bearing  on  fire  protection. 

Preliminary  to  'a  consideration  of  the  water  works  proper, 
it  is  usual  to  make  some  investigation  of  the  organization  and 
maintenance  of  the  works.  A  great  majority  of  the  water  supply 
systems  are  owned  by  the  municipality,  and  the  general  tendency 
is  towards  an  increase  of  municipal  ownership.  As  a  general 
proposition,  better  fire  protection  is  Hkely  to  be  furnished  by 
municipal  owned  works  than  by  privately  owned,  although 
we  have  examples  of  private  ownership  rendering  service  com- 
paring very  favorably  with  the  best  municipally  owned  works. 
Many  of  these  plants  are  operated  with  a  high  degree  of  effi- 
ciency and  with  the  idea  that  the  best  way  to  forestall  municipal 
ownership  is  to  render  reliable  and  efficient  service. 

The  best  municipally  owned  plants  are  found  to  be  under 
the  control  of  trained  executives  and  with  employees  appointed 
under  properly  administered  civil  service  rules  and  secure 
tenure  of  office.  An  indication  of  good  management  is  found 
in  proper  records  and  plans  of  physical  structures  and  the 
operation  of  the  system,  since  only  by  the  keeping  of  such 
records  and  a  study  of  them  from  year  to  year,  and  by  comparison 
with  similar  works  in  other  cities,  are  the  best  results  to  be 
obtained. 

Most  modern  water  works  have  one  or  more  emergency 
crews,  provided  with  emergency  wagons  loaded  with  the  tools 
necessary  for  prompt  action  in  case  of  a  break  in  the  mains  or 
other  accident.  At  the  quarters  where  this  crew  is  stationed 
it  is  usual  to  make  provision  for  receiving  alarms  of  fire ;  similar 
provisions  should  be  made  at  the  supply  works  and  are  especially 
necessary  where  supply  is  by  direct  pumping  and  pressures  are 
increased  on  receipt  of  fire  alarms.  It  is  more  or  less  common 
practice  for  at  least  one  responsible  employee  to  respond  to 
alarms  in  the  more  important  districts  to  cooperate  with  the 
fire  department  in  increasing  or  conserving  the  water  supply. 


Water  supplies  may  be  considered  under  two  general  sub- 
divisions, Supply  Works  and  Distribution  System;  both  of 
these  must  be  viewed  from  the  standpoints  of  adequacy  and 
reliability. 

It  seems  best  to  classify  systems  as  Gravity,  Combined 
and  Direct  Pressure,  with  the  following  definitions : 

A  Gravity  System  is  one  in  which  supply  is  delivered 
direct  to  the  city  from  the  source  of  supply  without  the  use 
of  pumps. 

A  Combined  System  is:  (1)  Where  supply  is  pumped 
from  the  source  to  a  distributing  reservoir,  and  thence  flows 
by  gravity  to  the  system;  (2)  Where  supply  is  pumped  to  the 
city  direct  with  a  reservoir  as  an  equalizer. 

A  Direct  Pressure  System  is  considered  as  one  delivering 
by  pumping  direct  to  the  distribution  system,  with  less  than 
one-half  average  day's  storage  in  standpipe  or  small  reservoir. 

A  Gravity  System  has  usually  a  less  number  of  elements 
likely  to  affect  reliability,  and  is  therefore  to  be  preferred; 
it  is  possible,  however,  for  the  other  classes  of  systems,  properly 
designed  and  safeguarded,  to  reach  a  high  degree  or  reliability. 

One  of  the  main  points  to  be  considered  in  any  system  is 
adequacy  of  supply,  especially  during  such  a  series  of  dry  years 
as  most  sections  of  the  country  have  experienced  recently.  It 
is  comparatively  easy,  with  the  experience  obtained  during  this 
and  other  dry  periods  to  predict  the  yield  from  any  watershed 
in  the  Eastern  or  the  Northern  United  States;  but  it  is  a  much 
more  difficult  problem,  in  the  Southwest  for  instance,  where 
rainfall  is  very  irregular  and  the  run-off  from  any  given  area  of 
watershed  much  more  uncertain.  It  is  usually  considered  that 
in  this  section  of  the  country  the  watershed  may  be  economically 
developed  by  the  construction  of  storage  reservoirs  to  yield 
from  800,000  to  1,000,000  gallons  per  day  per  square  mile, 
requiring  reservoir  storage  of  250,000,000  gallons  per  square 
mile  of  watershed  or  more.  Where  the  supply  is  from  wells, 
it  is  usual  to  construct  storage  reservoirs,  either  underground 
near  the  pumping  station,  or,  if  possible,  at  an  elevation;  if 
no  such  storage  is  provided,  the  minimum  rate  of  flow  must  be 
equal  to  maximum  domestic  consumption  and  fire  demands. 

Still  other  sources  of  supply  are  unfailing  lakes  or  streams, 
in  which  case  the  main  feature  to  be  considered  is  the  danger 
of  interruption  on  account  of  ice  formations,  floods  or  silting 
or  shifting  channels,  etc. 

Gravity  systems  may  have  supply  lines  or  conduits  leading 
directly  from  the  storage  reservoirs  to  the  distribution  system; 
they  are  more  often  provided  with  distributing  reservoirs  as 
near  the  city  as  possible.  With  such  a  distributing  reservoir 
of  adequate  size,  it  is  safe  to  rely  upon  a  single  supply  line 
from  the  source,  and  this  supply  line  need  be  only  large  enough 
to  furnish  maximum  daily  draft,  since  the  reservoir  will  take 


care  of  the  difference  in  demand  between  day  and  night,  and 
also  of  sudden  large  drafts  for  fires  or  other  emergencies. 

For  proper  reliability,  provided  there  is  only  a  single  supply 
main  from  the  storage  reservoirs,  it  is  considered  that  the  dis- 
tributing reservoir  should  have  a  capacity  equal  to  five  days* 
domestic  consumption  plus  ten  hours'  fire  flow.  Many  of  the 
larger  cities  have  constructed  reservoirs  holding  even  a  greater 
supply.  New  York  City  is  constructing,  in  connection  with 
its  new  Catskill  supply,  a  reservoir  about  15  miles  north  of  the 
city  line  and  near  the  lower  end  of  the  aqueduct,  which  will 
hold  about  forty  billion  gallons,  or  the  equivalent  of  eighty 
times  the  daily  capacity  of  the  aqueduct;  there  is  another 
reservoir  just  north  of  the  city  line,  which  will  hold  the  equivalent 
of  about  two  days'  supply  and  will  equalize  the  daily  and  hourly 
variations  of  demand.  Of  the  many  breaks  in  large  mains  which 
are  on  record,  there  are  a  number  where  repairs  have  required 
2  to  5  days,  and  it  seems  fair  to  assume  a  reservoir  storage  of 
5  days  as  sufficient  to  provide  for  restoration  of  service. 

There  has  been  much  discussion  as  to  the  relative  merits 
of  the  di^erent  materials  used  in  constructing  force  and  supply 
mains.  Cast  iron  is  the  material  most  commonly  used  in  the 
East  and  Middle  West,  but  steel  and  wood-stave  pipe  have 
certain  advantages  under  conditions  adapted  to  their  use, 
and  have  given  excellent  service  in  a  number  of  instances. 

Steel  pipe  has  been  used  quite  extensively  for  supply  con- 
duits in  the  new  Catskill  works  for  New  York,  as  well  as  in  the 
Massachusetts  Metropolitan  Works,  and  a  large  number  of 
other  cities.  It  has  the  advantage  of  not  being  liable  to  sudden 
and  complete  rupture  in  case  of  settlement,  and  may  have  a 
long  life  if  used  where  it  is  not  liable  to  corrosion  from  electrolysis 
or  adverse  soil  conditions ;  its  life  depends  to  a  very  large  degree 
on  securing  a  metal  free  from  impurities,  and  on  the  excellence 
of  the  preservative  coating. 

Wood-stave  pipe  has  been  used  mainly  in  the  Northwest. 
Its  advantages  are  lightness  and  low  cost,  and  the  ease  of  making 
repairs.  The  staves  should  be  of  such  thickness  and  the  pipe 
should  be  so  covered  with  earth  that  the  wood  will  be  kept 
constantly  moist  and  will  consequently  not  quickly  decay;  if 
not  properly  constructed  and  laid,  its  life  is  short. 

Masonry  conduits  were  used  by  the  Greeks  and  Romans 
before  the  Christian  era,  and  where  topographical  conditions 
permit  they  are  often  the  most  economical  type  of  construction 
for  carrying  large  quantities  of  water. 

For  the  majority  of  systems,  it  is  necessary  to  pump  the 
water,  either  to  reservoirs  or  directly  to  the  distribution  system, 
and  there  is  a  great  variety  of  conditions  governing  the  number 
and  size  of  pumps,  their  type  and  method  of  driving.  Various 
methods  of  determining  pumping  capacity  necessary  for  safe 
reserve  have  been  proposed;    that  which  has  commended  itself 


8 

to  the  engineers  of  the  National  Board  as  the  most  reasonable 
requires  that  pumping  capacity,  with  any  two  pumps  out  of 
service,  must,  together  with  reservoir  storage,  be  such  as  to 
maintain  full  maximum  consumption  for  5  days  and  fire  flow 
for  10  hours.  In  cities  of  25,000  population  or  less,  there  is 
less  probability  of  fires  occurring  while  pumps  are  out  of  com- 
mission, values  are  less  and  the  conflagration  hazard  not  so  high, 
and  the  above  requirement  is  especially  severe,  and  it  is  usual 
to  consider  only  one  pump  out  of  service.  In  the  very  largest 
cities,  it  may  be  necessary  to  assume  more  than  two  pumps 
out  of  service  simultaneously;  the  general  rule  that  one-fourth 
of  the  total  number  of  pumps  should  be  considered  as  reserve 
units  is  perhaps  a  reasonable  one.  We  have  records  of  a  number 
of  cases  of  two  pumps  out  of  service  at  once,  usually  while  one 
of  them  was  dismantled  for  repairs  or  overhauling;  there  are 
doubtless  a  great  many  other  cases  of  which  there  is  no  record. 
Of  course,  the  likelihood  of  this  occurring  during  a  serious  fire 
is  not  great,  although  it  has  happened;  and  a  shortage  of  water, 
occasioned  either  by  insufficient  pumping  capacity  or  otherwise, 
is  quite  likely  to  be  one  of  the  reasons  for  the  development  of 
a  serious  fire.  If  elevated  reservoir  storage  is  provided,  less 
pumping  capacity  is  necessary;  experience  indicates  that  a 
5-day  period  is  sufficient  to  restore  to  service  at  least  one  of  the 
pumps  which  is  considered  as  being  out  of  commission. 

Steam-driven  reciprocating  pumps  comprise  the  great 
majority  in  water  works  service;  in  recent  years,  however, 
centrifugal  pumps  for  both  low-lift  and  high  pressure  work 
have  made  great  advances,  being  driven  usually  either  by  steam 
turbines  or  by  electric  motors  with  power  in  most  cases  from 
a  separate  generating  plant.  Most  types  of  internal  combustion 
engines  are  not  considered  to  have  been  developed  to  the  point 
where  they  possess  the  same  degree  of  reliability  as  steam 
engines;  one  disadvantage  has  arisen  from  the  difficulty  of 
securing  properly  trained  men  to  operate  them.  However,  a 
number  of  installations,  both  in  industrial  and  in  water  works 
plants,  have  been  in  successful  operation  for  a  number  of  years, 
and  the  various  features  which  are  found  to  be  unreliable  and 
unnecessarily  complicated  will  doubtless  be  corrected  as  the 
manufacturers  discover  the  necessity  for  so  doing. 

The  self  contained  plant  possesses  a  less  number  of  elements 
of  unreliabiUty,  although  it  is  possible  to  so  safeguard  the 
various  hazards  in  any  plant  as  to  secure  entirely  satisfactory 
service;  for  instance,  the  separate  fire  main  systems  in  New 
York  and  Brooklyn,  and  that  proposed  for  Boston,  have  elec- 
trically operated  pumps  with  power  from  two  or  more  outside 
sources,  with  underground  electrical  feeders  in  duplicate.  The 
San  Francisco  separate  fire  main  system^  has  two  self  contained 
pumping  stations,  with  steam-turbine  driven  centrifugal  pumps, 
the   Baltimore   system   one   station   with   steam-engine   driven 


9 

reciprocating  pumps,  and  the  Philadelphia  system  two  stations 
with  gas  engine  driven  reciprocating  pumps.  Electrical  feeders 
from  outside  sources  should  be  in  duplicate  and  by  separate 
routes,  and  if  overhead  this  requirement  is  -more  vital  than 
if  underground. 

Other  features  of  the  supply  works  which  it  is  necessary 
to  consider  include  construction  and  hazards  of  pumping  stations, 
filter  plants,  boilers,  steam  piping,  and  suction  and  discharge 
piping. 

The  most  desirable  type  of  construction  for  a  pumping  sta- 
tion is  of  course  the  one  containing  no  combustible  material; 
a  few  such  have  been  constructed.  The  ordinary  station,  with 
no  unnecessary  woodwork  and  no  concealed  spaces,  can  be 
rendered  reasonably  safe  by  the  installation  of  an  automatic 
sprinkler  system,  and  it  is  rather  surprising  that  no  more  of 
them  have  been  so  equipped.  There  are  probably  a  dozen 
instances  during  the  past  6  or  8  years  of  the  destruction  by  fire 
of  pumping  stations  of  more  or  less  importance;  some  of  these 
fires  were  from  exposures  and  the  others  from  internal  hazards. 

Filters  are  of  two  kinds,  slow  sand  and  rapid  sand  or  mechan- 
ical filters,  the  difference  being  that  the  latter  has  arrangements 
for  raking  or  agitating  the  sand  during  cleaning,  and  use  a 
coagulant  to  aid  in  filtration.  Slow  sand  filters  are  usually 
designed  to  operate  normally  at  a  rate  of  3  to  6  million  gallons 
per  day  per  acre,  depending  largely  upon  the  character  of  the 
water  to  be  filtered;  they  may  be  forced  to  about  double  the 
normal  rate  in  emergency.  Rapid  sand  filters  are  usually 
operated  at  a  rate  of  100  to  125  million  gallons  per  day  per 
acre.  The  use  of  rapid  sand  filters  has  much  increased  in  the 
■  past  few  years,  as  better  methods  of  operating  them  have  been 
devised.  In  some  cases,  the  water  is  of  sufficiently  good  quality 
to  warrant  by-passing  filters  in  emergency;  if  not,  filter  capacity 
should  be  such,  with  one  bed  out  of  service  for  cleaning,  to 
provide,  together  with  clear  water  storage  either  at  the  station 
or  in  elevated  reservoirs,  for  maximum  domestic  demands 
and  10  hours'  fire  flow. 

It  is  rather  difficult  to  specify  exactly  the  boiler  capacity 
necessary  for  proper  reliability;  boilers  should  be  of  such  size 
and  number  as  secure  flexibility  of  operation,  and  at  least  the 
equivalent  of  the  largest  one  should  be  in  reserve  with  the 
required  pumping  capacity  in  operation.  The  best  arrangement 
of  steam  piping  is  the  loop  system,  so  arranged  and  gated  that 
a  failure  of  the  pipe  will  not  put  more  than  one  pump  or  boiler 
out  of  service,  and  the  renewal  or  repair  of  a  valve  not  more 
than  two  units. 

The  suction  and  discharge  piping  about  the  plant  is  arranged 
to  the  best  advantage  when  the  same  results  are  obtained  as 
noted  above  under  steam  piping;  of  course,  if  adequate  elevated 
reservoir  storage  is  provided,  it  is  not  necessary  to  go  to  the 


10 

same  extremes  in  guarding  against  interruptions  of  the  operations 
of  the  pumps. 

We  have  already  discussed  the  question  of  adequacy  and 
reliabiHty  of  supply  mains  or  conduits  from  storage  reservoirs 
to  distributing  reservoirs.  Force  or  supply  mains  from  dis- 
tributing reservoirs  or  pumping  stations  to  the  distribution 
system  cannot  be  considered  adequate  unless  able  to  deliver 
without  too  great  friction  loss  the  total  quantities  required  for 
maximum  domestic  consumption  and  fire  flow;  for  proper 
reliability  there  should  be  two  or  more  of  these  mains,  of  such 
size  that  with  any  one  out  of  service  the  others  will  take  care 
of  maximum  demands.  Good  design  calls  for  mains  to  be  laid 
far  enough  apart  so  that  a  failure  of  one  is  not  likely  to  affect 
the  others,  and  for  special  precautions  against  failure  at  stream 
or  railroad  crossings  or  other  points  where  breaks  are  most 
likely  to  occur.  Parallel  mains  should  be  cross-connected  and 
adequately  gated  at  intervals  of  not  more  than  one  mile,  and 
should  have  air-valves  at  high  points  and  blow-offs  at  low  points. 
The  importance  of  proper  design  and  location  of  these  latter 
is  sometimes  underestimated;  in  case  it  becomes  necessary 
to  drain  the  water  from  a  main  in  order  to  make  repairs,  the 
time  consumed  in  draining  it  is  often  of  material  consequence. 

We  have  now  brought  the  water  to  the  distribution  system, 
the  function  of  which  is  to  furnish  supply  to  the  various  parts 
of  the  city,  and  for  the  various  purposes  for  which  it  is  needed. 
These  purposes  naturally  divide  themselves  into  two  general 
classes:  First,  ordinary  uses,  including  domestic,  commercial 
and  public;  second,  fire  extinguishment.  The  relative  demands 
on  the  system  as  a  whole  vary  with  the  size  of  the  city  and  the 
rate  of  ordinary  consumption,  and  the  relative  demands  of  the 
different  sections  of  the  city  likewise  vary  with  the  character 
of  occupancy. 

The  consumption  of  water  for  other  than  fire  extinguish- 
ment will  naturally  vary  greatly  with  the  character  of  the  city 
and  the  methods  adopted  to  prevent  waste  and  leakage;  an 
accurate  determination  of  the  actual  total  consumption  is  often 
lacking,  especially  in  gravity  systems,  on  account  of  the  absence 
of  measuring  devices  on  supply  mains.  The  average  per  capita 
rate  is  probably  about  100  to  120  gallons  per  day,  with  individual 
cases  ranging  from  30  to  350  gallons;  a  reasonable  average  for 
fairly  well  metered  systems  is  75  gallons,  with  a  range  from  30 
to  100  gallons.  The  lowest  figure  given  above  represents  con- 
sumption in  a  city  with  comparatively  limited  opportunities 
for  using  water  and  with  practically  all  services  metered;  the 
highest  figure  is  for  a  city  where  water  is  cheaply  supplied  and 
almost  no  effort  is  made  to  prevent  waste  and  leakage. 

A  high  rate  of  consumption  naturally  results  in  a  lower 
available  margin  for  fire  protection,  and  the  relations  of  maxi- 
mum to  average  rate  is  also  important,  since  provision  must 


11 

be  made  for  at  least  the  maximum  day  rate.  A  system  having 
a  large  percentage  of  metered  services  will  show  a  low  or  moderate 
average  rate,  and  usually  a  reasonable  low  maximum.  The 
maximum  rate  occurs  either  in  very  cold  weather,  due  to  allow- 
ing fixtures  to  run  in  order  to  prevent  freezing,  or  in  hot,  dry 
weather  for  lawn  sprinkling.  Average  figures  for  a  large  number 
of  cities  reported  on  by  the  National  Board  show  the  daily 
average  for  the  maximum  month  to  be  27  per  cent,  in  excess  of 
the  average  for  the  year,  the  maximum  day  50  per  cent,  in 
excess  of  the  average  for  the  year,  and  the  maximum  hourly 
rate  about  100  per  cent,  in  excess  of  the  daily  average  for  the 
year;  in  some  cities,  these  percentages  are  much  higher  than 
the  figures  quoted. 

One  of  the  first  points  to  be  considered  in  the  design  of 
a  system  is  the  pressure  which  may  be  made  available  in  the 
distribution  system ;  this  has  a  strong  influence  on  the  character 
of  the  fire  protection  furnished,  both  as  respects  ability  to  fur- 
nish hose  streams  directly  from  hydrants  as  against  the  neces- 
sity of  using  fire  engines,  and  as  repects  ability  to  furnish  direct 
supply  to  automatic  sprinkler  equipments.  The  earlier  systems 
in  this  country  were  mostly  low  pressure,  i.  e.,  less  than  40 
pounds.  In  a  number  of  these  cases,  pressures  have  been  materi- 
ally increased,  usually  at  a  time  when  a  new  supply  works  was 
being  put  in  service;  the  increase  in  pressure  is  justified  partly 
because  of  the  necessity  for  better  domestic  service  to  the  higher 
buildings  now  being  erected,  and  partly  by  the  better  fire  pro- 
tection furnished.  The  tendency  to  follow  precedent  is  appar- 
ently as  strong  in  water  works  design  as  in  most  other  fields, 
as  illustrated  by  the  similarity  between  the  systems  of  various 
groups  of  municipalities  in  different  parts  of  the  country,  with 
respect  to  pressures  as  well  as  other  features  of  design. 

Practically  all  the  works  now  being  constructed  or  rebuilt 
are  designed  to  carry  a  pressure  of  70  pounds  or  higher.  This 
pressure,  if  well  maintained,  will  provide  for  automatic  sprinkler 
supply  in  buildings,  up  to  about  eight  stories  in  height,  but  is 
hardly  enough  for  direct  hydrant  streams,  except  in  residential 
districts  and  in  the  mercantile  districts  of  the  smaller  cities 
where  practically  all  the  buildings  are  less  than  four  stories 
high.  As  noted  elsewhere,  hydrant  distribution  has  much  to 
do  with  the  quality  of  the  fire  protection  furnished;  close 
hydrant  spacing  enables  the  use  of  short  lines  of  hose  and  results 
in  greater  effective  pressure  at  the  nozzle. 

In  National  Board  reports,  a  hydrant  pressure  of  60  pounds 
in  residential  districts  and  75  pounds  in  most  mercantile  and 
manufacturing  districts,  maintained  during  fire  draft,  have  been 
considered  the  minimum  for  effective  direct  hydrant  streams; 
and  with  these  pressures,  most  of  the  hose  lines  must  be  of  only 
moderate  length  and  some  fire  engines  should  be  provided  for 
use  with  the  longer  hose  lines  or  the  powerful  streams  from 


12 

large  nozzles  and  on  higher  buildings.  A  pressure  of  60  pounds 
at  the  hydrant  will  furnish  fairly  effective  streams  for  buildings 
not  more  than  four  stories  high,  through  300-foot  lines  of  2}/2- 
inch  hose  and  IJ/g-ii^ch  nozzles,  or  through  400-foot  lines  of 
hose  and  1-inch  nozzles;  75  pounds  will  enable  hose  lines  100 
or  150  feet  longer  than  those  above  named  to  be  used.  Three- 
inch  hose  will  more  than  double  the  effective  radius  of  action 
of  a  hydrant,  and  should  certainly  be  used  for  heavy  streams. 

The  total  amount  of  water  used  for  fire  extinguishment  is 
very  small,  reliable  estimates  in  a  number  of  cities  averaging 
about  0.1  gallon  per  day,  or  less  than  40  gallons  per  capita  per 
year.  However,  the  rate  at  which  this  is  likely  to  be  required 
adds,  in  most  cases,  very  largely  to  the  necessary  capacity  of 
the  system.  In  a  paper  presented  to  the  American  Water  Works 
Association  in  1911,  it  is  estimated  that  that  portion  of  the  total 
cost  of  water  works  necessitated  by  fire  protection  requirements 
would  vary  from  60  per  cent,  in  a  community  of  10,000  popula- 
tion to  15  per  cent,  in  one  of  200,000;  the  corresponding  per- 
centages as  relates  to  cost  of  distribution  system  alone  are 
estimated  at  56  and  10,  respectively.  Public  fire  hydrant  ser- 
vice is  usually  paid  for  upon  the  basis  of  an  annual  rental  for 
each  hydrant,  and  the  revenue  from  this  source  seldom  bears 
any  relation  to  the  cost  or  the  value  of  the  service  rendered. 
The  average  hydrant  rental  is  probably  in  the  neighborhood  of 
$40  per  year,  with  a  range  of  $5  to  $100.  The  cost  of  fire  hydrant 
service,  based  upon  general  present  practice  as  to  number  of 
hydrants  installed,  is  estimated  in  the  paper  above  referred  to 
at  about  $55.  Any  method  of  payment  involving  a  charge  per 
hydrant  is  undesirable,  as  tending  to  limit  the  number  of  hydrants 
below  that  necessary  for  good  fire  protection. 

The  distribution  system  may  be  considered  as  made  up, 
in  addition  to  the  street  mains,  of  valves,  fire  hydrants,  service 
connections  and  fixtures,  including  those  which  furnish  supply 
to  sprinkler  equipments  and  standpipes. 

In  designing  a  new  system,  it  is  necessary  to  decide  upon 
the  use  of  one  of  the  many  formulas  which  have  been  devised 
to  determine  the  probable  carrying  capacity  of  different  sized 
mains.  It  has  been  our  experience  that  the  Williams  &  Hazen 
formula,  used  either  in  connection  with  the  book  of  tables  or 
the  slide  rule,  is  the  most  generally  convenient.  The  values  of 
"C"  in  this  formula,  as  given  in  the  tables,  apply  very  well  to 
pipe  carrying  impounded  surface  water,  such  as  is  generally 
in  use  in  this  section  of  the  country;  these  values  show  a  de- 
crease in  carrying  capacity  of  cast-iron  pipe  of  25  to  30  per  cent, 
in  20  years,  and  of  38  to  45  per  cent,  in  40  years.  The  smaller 
sizes  naturally  show  the  greatest  decrease.  For  most  well  waters 
and  the  harder  waters  found  in  the  Great  Lakes,  the  rate  of 
deterioration  is  somewhat  less,  and  a  higher  value  of  "C"  must 
be  used  for  pipe  of  a  given  age. 


13 

No  pipe  as  small  as  4-mch  should  be  laid  to  supply  hydrants; 
roughly,  one  6-inch  will  carry  the  same  quantity  of  water  as 
three  4-inch,  and  one  8-inch  the  same  quantity  as  six  4-inch. 
The  recommendations  as  to  sizes  of  minor  distributors  incor- 
porated in  most  of  the  reports  of  the  Committee  on  Fire  Pre- 
vention of  the  National  Board  read  as  follows : 

"That  the  following  be  adopted  as  the  standard  minimum  size  of 
mains  used  for  hydrant  supply  for  all  future  construction: 

a.  In  residential  districts,  8-inch;  6-inch  to  be  used  only  to  com- 
plete a  good  gridiron,  and  in  no  case  in  blocks  600  feet  or  more  in  length. 

b.  For  important  mercantile  and  manufacturing  districts,  8-and 
12-inch;  the  former  to  be  used  only  in  sections  where  they  complete  a 
good  gridiron  and  the  latter  for  long  lines  not  cross-connected." 

The  further  recommendation  is  usually  made, 
"That  all  4-inch  mains  used  for  hydrant  supply  be  replaced  within 
five  years." 

A  note  attached  to  this  recommendation  reads : 

"A  gridiron  system  of  mains  of  the  sizes  recommended  above  is 
satisfactory  only  when  cross-connected  at  all  intersections,  free  from  dead 
ends,  and  with  large  secondary  cross-feeder  mains  at  frequent  intervals." 

The  maximum  allowable  length  of  the  smaller  mains  between 
supporting  larger  mains  is  dependent  very  largely  upon  the 
spacing  of  the  12-  and  16-inch  secondary  feeders,  and  somewhat 
upon  the  initial  pressure  available.  The  maximum  of  600  feet 
for  a  6-inch  pipe  is  intended  to  apply  to  the  type  of  system  most 
often  found,  with  12-  or  16-inch  mains  3,000  or  4,000  feet  apart 
in  either  directions,  and  carrying  such  pressures  that  the  total 
friction  loss  in  the  distribution  system  should  not  be  allowed 
to  exceed  15  or  20  pounds  during  maximum  draft.  There  are 
some  systems  having  secondary  feeders  not  more  than  1,500  or 
2,000  feet  apart,  or  with  an  unusually  high  initial  pressure, 
where  an  unsupported  length  of  1,000  or  1,500  feet  of  6-inch 
pipe  will  still  be  able  to  furnish  adequate  hydrant  supply  at 
pressure  not  too  greatly  reduced. 

For  pipe  extensions  into  newly  developed  districts,  where 
the  gridiron,  as  well  as  the  supporting  system  of  large  mains 
is  likely  to  be  incomplete  for  some  time,  a  number  of  progressive 
departments  are  using  8-inch  as  the  minimum  size.  Other  cities 
have  in  years  past  adopted  the  contrary  policy  of  laying  4-inch 
mains  into  new  sections,  on  the  theory  that  the  demand  would 
be  light,  and  no  larger  size  was  justified,  and  with  the  result 
that  as  these  sections  became  more  closely  built,  it  was  difficult 
to  secure  an  adequate  system  without  replacing  the  smaller 
sizes.  However,  it  is  at  present  the  almost  universal  practice 
to  lay  no  pipe  smaller  than  6-inch  for  hydrant  supply.  A  recent 
summary  of  the  practice  in  25  cities  in  New  England,  and  New 
York  shows  only  one  where  4-inch  is  still  being  used ;  in  most  of 
them  the  4-inch  is  gradually  being  replaced  and  in  a  few  others 
there  is  none  in  service. 


14 

For  mains  in  the  distribution  system,  cast-iron  is  usually 
considered  in  a  class  by  itself,  both  as  to  length  of  service  and 
general  reliability;  it  is,  however,  subject  to  occasional  sudden 
and  disastrous  breaks,  sometimes  without  apparent  cause.  Care 
is  necessary  in  testing  for  defective  pipes,  both  at  the  foundry 
and  after  laying,  and  many  ruptures  have  occurred  from  a 
settling  of  the  pipe  line  or  from  lack  of  care  in  avoiding  high 
points  of  rock  or  hard  earth  in  the  trench,  resulting  in  an  uneven 
bed  and  unusual  stresses  in  the  pipe.  In  the  attempt  to  find  a 
material  less  liable  to  sudden  rupture,  the  use  of  steel  or  wrought 
iron  pipe  has  been  advocated;  for  the  separate  fire  main  system 
in  the  City  of  Baltimore,  installed  in  1910,  steel  pipe  was  used, 
with  special  attention  to  eliminating  impurities  from  the  metal 
and  securing  an  effective  and  durable  coating  for  the  pipe.  Both 
these  points  are  essential  if  corrosion  is  to  be  avoided.  Kalamein 
pipe,  which  is  essentially  a  galvanized  pipe,  has  been  used  with 
considerable  success  in  some  Western  cities ;  it  has  not  the  life  of 
cast-iron  but  is  not  so  liable  to  rupture.  Wood-stave  pipe  has 
also  been  tried  in  some  Western  cities,  and  banded  wooden  pipe 
in  some  Eastern  cities,  but  their  use  in  distribution  systems  is 
not  advocated  by  the  water  works  officials  who  have  had  ex- 
perience with  it.  About  20  or  30  years  ago  many  systems  in 
the  East,  especially  in  New  England,  were  constructed  of  cement- 
lined  pipe,  which  consists  of  a  thin  sheet  of  wrought-iron  or 
steel,  covered  with  cement  mortar  inside  and  out,  and  in  some 
cases  of  two  wrought-iron  shells,  with  layers  of  cement  between 
and  outside  of  them.  These  pipes  sometimes  gave  good  satis- 
faction for  a  number  of  years,  depending  largely  upon  the  quality 
of  workmanship.  In  general,  this  class  of  pipe  has  been  found 
unreliable  and  subject  to  more  or  less  frequent  breaks,  usually 
because  the  cement  lining  was  not  water  tight  and  the  wrought 
iron  has  corroded  and  become  so  weakened  that  a  slight  shock 
has  ruptured  it.  Trouble  has  also  resulted  from  lightning  dis- 
charges, which  have,  in  some  cases,  ruptured  a  considerable 
length  of  pipe. 

From  a  fire  protection  standpoint,  the  main  consideration 
in  respect  to  gate  valves  is  to  secure  sufficiently  good  spacing 
so  that  it  will  not  be  necessary  to  close  off  an  unreasonable 
length  of  pipe  in  case  of  accident  or  repairs.  The  recommenda- 
tion in  the  National  Board  reports,  that  this  length  of  pipe  shall 
not  exceed  500  feet  in  mercantile  or  manufacturing  districts, 
nor  800  feet  in  other  districts,  is  considered  reasonable,  since 
many  of  the  systems  reported  upon  have  gate  valve  distribution 
at  least  as  good  as  this.  A  properly  designed  and  ruggedly 
constructed  valve  is,  of  course,  essential  to  good  maintenance 
and  reliable  service.  To  make  sure  that  valves  are  in  good  con- 
dition and  are  left  open  after  being  used,  systematic  inspection 
should  be  made  at  least  annually,  and  records  kept  of  inspec- 
tions and  of  all  valves  operated.    A  good  illustration  of  the  neces- 


15 

sity  for  this  is  offered  by  the  results  of  an  inspection  by  the  water 
department  of  a  certain  large  city  a  few  years  ago ;  of  about 
7,000  valves  inspected,  49  were  found  closed,  300  partially 
closed  and  100  were  either  not  shown  on  the  plans  or  were  not 
in  the  ground.  In  another  case,  a  serious  shortage  of  water 
at  a  rapidly  spreading  fire  was  discovered  to  be  due  to  a  closed 
gate.  In  some  cities  care  has  not  been  taken  to  secure  gates  all 
opening  in  the  same  direction,  with  the  result,  especially  when 
no  proper  records  are  kept,  that  gates  supposed  to  be  opened 
have  been  closed.  In  one  city  of  about  30,000  population,  the 
fire  flow  tests  conducted  by  National  Board  engineers  showed  a 
drop  in  pressure  much  greater  than  was  anticipated.  There 
were  two  mains,  a  16-inch  and  a  12-inch,  extending  from  the 
pumping  stati9n  to  the  mercantile  district  near  by,  with  connect- 
ing lines  crossing  the  street  between  the  two  mains ;  there  should 
have  been  an  adequate  quantity  of  water  available  with  a  loss 
of  head  of  15  or  20  pounds,  whereas  a  less  discharge  resulted  in 
a  loss  of  head  of  over  80  pounds.  It  turned  out  that  a  valve  on 
the  lOrinch  line  and  two  on  the  connecting  lines  were  closed, 
although  supposed  by  the  water  department  to  be  open;  they 
operated  in  the  opposite  direction  from  most  of  the  others  in 
the  system  and  had  been  closed  for  no  one  knows  how  long,  with 
little  likelihood  of  the  fact  being  discovered  except  by  some 
such  tests  as  were  made. 

Hydrants  should  be  of  such  dimensions  and  design  as  to 
pass  adequate  quantities  of  water  with  reasonable  loss  of  head, 
should  be  sufficiently  well  distributed  to  permit  of  the  maximum 
number  of  streams  required  to  be  concentrated  on  any  fire 
without  hose  lines  of  excessive  length,  and  good  condition  should 
be  assured  by  frequent  inspection  and  repairs  when  necessary. 

Comparatively  few  fire  departments  attempt  to  •  supply 
more  than  one  engine,  serving  an  average  of  two  hose  lines  at 
a  hydrant,  or  to  use  more  than  two  direct  hose  lines  from  each 
hydrant;  for  this  service,  which  means  a  flow  of  500  or  600 
gallons  per  minute,  the  use  of  a  hydrant  with  5-inch  foot- valve 
and  6-inch  barrel  and  branch  will  result  in  a  total  friction  loss 
of  not  more  than  3  pounds,  and  this  figure  may  be  taken  as  a 
reasonable  maximum  loss  under  maximum  draft  from  any 
hydrant.  Smaller  dimensions  than  those  noted  above  may 
be  allowable  for  hydrants  on  small  systems  or  in  scattered  resi- 
dential districts,  but  in  general  no  4-inch  hydrants  nor  connec- 
tions to  mains  should  be  used,  and  it  is  often  worth  while  to 
replace  4-inch  connections,  especially  if  more  than  10  or  12 
feet  long. 

A  study  of  hydrant  spacing  in  most  of  the  large  cities  of 
the  country  has  led  to  the  conclusion  that  the  area  served  per 
hydrant  is  a  better  index  of  the  protection  afforded  than  is  the 
linear  spacing  or  distance  between  hydrants.  This  is  so  mainly 
because  of  the  difference  in  the  size  and  shape  of  blocks  in  various 


16 

cities.  An  area  divided  into  large  blocks  will  require  fewer 
hydrants  to  secure  a  given  linear  spacing  than  if  the  same  area 
is  divided  into  small  blocks,  even  though  in  the  former  case 
the  fire  hazard  and  the  necessity  for  good  hydrant  distribution 
are  greater. 

The  quantity  of  water  required  for  any  district  having 
been  fixed  upon,  proper  hydrant  distribution  may  be  best  deter- 
mined from  a  sketch  plan  of  such  a  number  of  hose  lines  as  are 
necessary  to  care  for  this  quantity;  a  consideration  of  friction 
losses  in  hose  indicates  that  for  anything  like  effective  service 
no  hose  line  should  exceed  600  feet  in  length  if  from  a  fire  engine, 
nor  500  feet  if  direct  from  a  hydrant,  unless  the  hydrant  pressure 
considerably  exceeds  that  usually  found  where  direct  hydrant 
streams  are  depended  upon.  Considering  the  number  of  streams 
usually  taken  from  any  hydrant,  most  high-value  mercantile 
and  manufacturing  districts  will  require  at  least  one  hydrant 
to  each  40,000  to  80,000  square  feet  of  area  and  ordinarily  well 
built-up  residential  districts  one  hydrant  to  each  100,000  or 
120,000  square  feet;  the  requirements  will  vary  between  the 
limits  named,  depending  upon  the  total  amount  of  water  needed, 
and  upon  whether  direct  hydrant  streams  or  fire  engine  streams 
are  used.  As  good  or  better  distribution  will  be  found  in  many 
of  our  larger  cities,  and  in  the  case  of  mercantile  districts  corre- 
sponds roughly  to  a  linear  spacing  of  150  feet,  and  in  residential 
districts  of  300  feet.  For  each  mercantile  block  400  by  300 
feet,  center  to  center  of  streets,  there  should  be  at  least  three 
hydrants,  probably  located  to  the  best  advantage  two  at  each 
street  intersection  and  one  intermediate  hydrant  on  the  long 
side  of  the  block. 

Hydrants  in  poor  condition  are  most  often  the  result  of  in- 
discriminate use  for  other  than  fire  department  purposes.  This 
results  in  worn  operating  nuts,  worn  and  battered  threads  and 
leaky  foot-valves;  this  latter  trouble  is  probably  responsible 
for  most  frozen  hydrants,  since  a  hydrant  with  a  tight  foot- 
valve  and  proper  drainage  will  seldom  be  found  frozen. 

Reasonable  fire  protection  requirements  will  vary  with 
structural  conditions  and  with  other  features  affecting  the  con- 
flagration hazard,  and  to  some  extent  with  the  fire  department 
strength  of  the  city  under  consideration  and  of  its  neighbors. 
Population  is  naturally  not  always  a  fair  guide,  but  on  the 
whole  appears  to  be  the  best  meausre  for  the  approximate  quantity 
of  water  necessary.  Reports  issued  by  the  National  Board  recom- 
mend a  minimum  of  1,500  gallons  per  mintue  in  residential 
districts,  and  for  high  value  districts  a  quantity  approximately 
equal  to  1,000  V  x  where  x  is  the  population  in  thousands.  These 
quantities  are  considered  to  be  perhaps  50  per  cent,  in  excess 
of  what  may  actually  be  used  through  hose  lines;  the  50  per 
cent,  allowance  is  intended  to  take  care  of  the  loss  through  broken 
service  connections  to  buildings  burned  during  the  early  stages 


17 

of  a  bad  fire,  and  will  enable  normal  pressure  conditions  to  be 
maintained  for  a  time  at  least,  so  that  the  fire  department  may 
not  be  hampered  by  lack  of  pressure  as  long  as  there  is  a  chance 
to  control  what  might  develop  into  a  conflagration.  During 
most  of  the  conflagrations  of  which  an  estimate  of  the  amount 
of  water  used  has  been  possible,  the  maximum  used  on  the  fire 
and  wasted  through  broken  services  and  hydrants  left  open 
has  been  far  in  excess  of  what  any  of  these  systems  may  reason- 
ably be  expected  to  deliver  while  still  maintaining  normal  pres- 
sures. At  Salem,  for  instance,  the  maximum  was  at  the  rate  of 
nearly  18,000  gallons  per  minute,  nearly  three  times  the  amount 
called  for  by  the  above  requirements;  this  quantity  was  of 
course  delivered  at  very  low  pressure,  and  was  only  possible  because 
of  the  emergency  connections  to  the  systems  of  adjoining  muni- 
cipalities. 

To  determine  the  pipe  sizes  necessary  in  designing  a  new 
system,  analytical  iriethods  must  be  used,  with  certain  assump- 
tions as  to  the  effects  of  tuberculation  of  mains  and  other  friction 
producing  elements;  the  same  method  may  be  used  in  deter- 
mining the  capacity  of  an  existing  system,  but  the  results  will 
be  at  best  very  approximate  and  actual  flow  tests  from  hydrants 
will  give  much  more  satisfactory  and  reliable  figures. 

The  method  of  conducting  such  tests  as  practiced  by  the 
engineers  of  the  National  Board  of  Fire  Underwriters  is  a  develop- 
ment of  the  scheme  of  measuring  discharges  from  smooth-bore 
fire  department  nozzles  by  means  of  the  Pitot  tube  and  gage, 
originated  by  Mr.  John  R.  Freeman  and  now  used  by  the  Natit)nal 
Board  in  its  tests  of  fire  engines. 

It  is  possible  to  measure  hydrant  discharges  with  much 
greater  accuracy  by  the  use  of  short  lines  of  hose  and  large  nozzles 
than  from  open  butts;  however,  in  cities  where  the  normal 
hydrant  pressures  are  low,  only  a  small  part  of  the  total  quantity 
available  for  engine  supply  may  be  obtained  in  this  way,  and 
much  more  time  and  labor  is  consumed  than  when  open  butt 
discharges  are  measured.  For  these  reasons,  and  in  order  that  a 
representative  number  of  tests  might  be  made  in  a  reasonable 
time  in  the  various  cities  reported  on  by  the  National  Board, 
the  present  scheme  was  worked  out.  It  is  believed  that  the 
results  obtained  will  show  not  more  than  5  per  cent,  of  error. 

The  number  of  hydrants  in  a  group,  all  of  which  are  opened 
simultaneously,  varies  from  3  to  6,  or  even  more  in  exceptional 
cases,  depending  upon  the  quantity  of  water  available,  the 
pressures  and  the  character  of  the  district  in  which  the  test  is 
made.  It  is  usual  to  open  all  available  outlets  on  the  hydrants 
used;  however,  if  the  pressures  are  high  enough  to  furnish 
effective  streams  direct  from  hydrants,  it  is  better  to  open  only 
enough  outlets  to  lower  the  pressure  in  the  mains  to  a  figure 
assumed  to  be  the  minimum  consistent  with  good  fire  service, 


18 

which  will  range  from  60  to  75  pounds  or  more,  depending  upon 
the  character  of  the  districts. 

The  pressure  in  the  mains  before  and  during  the  tests  is 
determined  by  attaching  a  gage  to  a  hydrant  preferably  located 
near  the  center  of  the  group  to  be  tested;  it  is  sometimes  ad- 
visable to  have  another  gage  at  a  hydrant  outside  the  group, 
to  determine  the  loss  of  head  in  the  main  arteries,  or  a  recording 
gage  located  near  the  center  of  the  distribution  system  may  serve 
the  purpose  for  a  number  of  groups.  Knowing  the  loss  of  head 
due  to  ordinary  consumption,  and  the  additional  loss  due  to  the 
measured  flow  from  hydrants,  a  close  approximation  may  be 
made  of  the  quantity  available  at  any  given  pressure. 

Hydrant  outlets,  especially  the  large  ones,  are  often  not 
completely  filled  by  the  stream;  the  area  of  no  flow  is  almost 
always  a  segment  in  the  bottom  of  the  outlet,  of  varying  height 
depending  upon  the  design  of  the  hydrant  and  somewhat  upon 
the  velocity  of  the  stream.  Any  projection  into  the  waterway, 
such  as  the  end  of  the  stem  of  an  independent  valve  or  a  roughness 
of  the  nipple,  will  also  produce  small  "holes"  in  the  stream.  The 
area  of  no  flow  is  in  most  cases  fairly  well  defined,  and  the  shape 
of  the  "hole"  is  sufficiently  uniform  to  enable  its  proportion  to 
the  total  area  to  be  determined  by  measuring  its  height  with  a 
rule;  for  instance,  with  43/2-i^ch  outlet,  a  "hole"  1  inch  high 
forms  10  to  12  per  cent,  of  the  area  of  the  outlet,  a  13/^-inch  hole 
20  to  25  per  cent.,  and  so  on. 

In  determining  the  average  velocity  of  the  stream  issuing 
froni  the  outlet,  the  Pitot  tube  is  moved  throughout  the  area, 
and  the  observer  will  soon  train  himself  by  this  traverse  to  fix 
upon  a  substantially  accurate  average;  readings  noted  at  the 
center  and  near  the  ends  of  the  horizontal  and  vertical  diameters 
will  usually  suffice,  and  the  center  reading  in  a  small  outlet  is 
in  most  cases  very  near  the  average  for  the  whole  area.  Readings 
should  not  be  taken  closer  than  3^-inch  to  the  sides  of  the  orifice, 
since  there  is  a  noticeable  retardation  of  velocity  caused  by 
friction  against  the  walls  of  the  hydrant  nipple.  This  retardation 
necessitates  applying  a  coefficient  of  discharge,  which  has  been 
determined  by  careful  experiments  to  be  about  0.90;  this  is 
to  be  applied  after  allowance  has  been  made,  as  above  noted, 
in  the  case  of  outlets  not  completely  filled  by  the  stream. 

The  Pitot  tube  used  in  determining  discharges  from  hydrant 
outlets  has  a  straight  blade  about  4  inches  long,  which  is  threaded 
into  one  end  of  a  piece  of  3^ -inch  brass  pipe  8  or  10  inches  long 
on  the  other  end  of  which  is  screwed  the  gage  by  which  the  veloc- 
ity of  discharge  is  determined.  The  gage  which  appears  to  be 
best  suited  for  this  work  is  3-inch,  graduated  in  half  pounds 
from  0  to  50  pounds.  Such  a  gage  may  be  read  easily  to  the 
nearest  quarter  pounds;  corrections  should  be  made  as  indicated 
by  calibrations  before  and  after  using,  either  by  means  of  a 
weight  tester  or  by  comparison  with  an  accurate  test  gage. 


19 

Fire  flow  tests  made  as  described  above,  have  been  made  by 
National  Board  engineers  in  more  than  250  cities  throughout 
the  country;  this  method  has  also  been  adopted  by  a  number 
of  water  departments  and  private  companies.  It  has  proved 
to  be  very  useful  in  determining  the  quantities  of  water  available 
for  fire  protection  and  the  sizes  of  mains  necessary  for  proper 
reinforcement,  as  well  as  to  detect  abnormal  conditions  such 
as  closed  valves  or  other  obstructions  in  the  mains ;  it  is  believed 
to  be  the  easiest  and  most  reliable  method  of  making  the  deter- 
mination which  may  be  considered  final  in  any  system,  i.  e., 
its  ability  to  deliver  water  at  the  hydrant  outlet. 


Public  Fire  Def)artments 

BY 

GEO.  W.  BOOTH 

December   18.    1914 

Fire  department  organization,  equipment  and  operation 
naturally  possess  a  vital  interest  for  the  insurance  companies. 
In  fact,  some  of  the  first  fire  brigades  were  organized  and  sup- 
ported by  them,  being  taken  over  later  by  the  municipality,  in 
accordance  with  the  idea  that  the  service  was  for  the  common 
good,  and  should  be  supported  by  all,  insured  and  uninsured 
alike. 

Of  an  importance  which  increases  with  the  growth  of  a 
community  and  of  the  values  involved,  is  the  form  of  the  organi- 
zation of  the  fire  department.  In  times  past,  practically  all 
departments  were  volunteer  organizations,  survivals  of  the 
day  when  a  few  men  would  organize  for  mutual  protection,  with 
little  regard  for  the  property  of  others  unless  forming  an  ex- 
posure of  their  own.  These  volunteer  departments,  in  the  larger 
places,  have  mainly  given  way  before  the  demand  for  better 
trained  men  and  more  prompt  and  efficient  work.  The  next 
step  forward  was  a  part  paid  call  system,  with  or  without  some 
permanent  men  paid  full  time ;  this  system  has  been  extensively 
used  in  the  New  England  States  and  has  given  excellent  service. 
However,  the  call  system  is  being  rapidly  replaced,  especially 
in  the  larger  places,  by  full  paid  permanently  employed  depart- 
ments. The  reasons  for  this  are  somewhat  the  same  as  those 
for  discarding  the  volunteer  system.  For  example,  an  alarm 
of  fire  calls  out  many  workmen,  causing  a  loss  to  their  employers 
with  seldom  any  direct  benefit ;  the  objections  of  the  employers 
make  it  harder  each  year  to  obtain  good  men  for  the  fire  service. 
The  recent  introduction  of  automobile  apparatus  has  so  increased 
the  speed  of  response  that  unless  men  are  at  the  station  they 
cannot  respond  with  the  apparatus  and  their  delay  in  reaching 
the  fire  is  still  more  pronounced;  discipline  cannot  be  as  well 
maintained  and  drills  are  not  as  complete  nor  as  often  held, 
with  a  consequent  lack  of  efficiency  in  the  departments;  last, 
but  not  least,  a  call  or  volunteer  organization  does  not  readily 
lend  itself  to  fire  prevention  work,  as  does  a  paid  department. 
Further  consideration  will  be  given  some  of  these  items,  as  being 
of  first  importance  in  securing  the  highest  department  efficiency. 


21 

In  fire  departments,  as  in  other  branches  of  city  govern- 
ment, poHtical  domination  and  petty  graft  have  prevailed  at 
various  times.  It  goes  without  saying  that  the  appointment  of 
officers  and  men  for  other  reasons  than  their  fitness  for  fire 
service  will  almost  inevitably  result  in  demoralizing  the  force 
and  decreasing  its  efficiency;  probably  the  most  serious  effect 
is  obtained  when  political  debts  are  paid  in  the  appointment  of 
chief  officers.  Only  men  of  proven  ability  should  be  given  im- 
portant positions;  in  some  cases,  competent  chief  officers  of 
the  smaller  departments  have  been  appointed  to  similar  posi- 
tions in  the  larger  cities,  and  this  scheme  has  worked  out  well. 
For  all  officers,  long  tenure  of  office  is  desirable,  to  secure  proper 
familiarity  with  local  fire  conditions  and  the  general  duties  of 
the  position;  to  obtain  this,  as  well  as  to  eliminate  harmful 
political  changes,  the  appointment  of  all  officers  for  indefinite 
terms,  with  removal  only  under  charges,  is  desirable.  The 
method  of  appointment  best  adapted  for  any  city  depends  largely 
upon  the  size  of  the  city  and  local  conditions.  Civil  service 
methods  have  been  in  some  cases  rather  freely  criticized,  but 
it  is  doubtful  if  anything  better,  or  in  fact  as  good,  could  be 
substituted.  Where  civil  service  is  properly  applied,  the  past 
record  of  applicants  is  considered  and  they  must  successfully 
pass  a  rigid  physical  examination  before  taking  the  mental 
examinations.  While  the  mental  examination  may  bar  out 
some  otherwise  desirable  applicants,  yet  in  the  large  cities  there 
is  no  lack  of  applicants  and  it  is  readily  practicable  to  make 
physical  requirements  such  that  all  the  men  getting  on  the 
eligible  list  shall  have  the  making  of  able-bodied  firemen.  The 
varied  emergencies  and  requirements  of  modern  fire  depart- 
ment work  are  best  met  by  men  capable  of  passing  reasonable 
mental  as  well  as  the  physical  examinations,  rather  than  by 
men  whose  chief  asset  is  mere  strength. 

When  the  eligible  list  is  established,  appointments  should 
be  made  by  the  chief  rather  than  by  a  council  committee  or 
the  mayor,  and  appointments  should  not  be  made  permanent 
until  the  officers  have  had  opportunity  to  observe  the  work  of 
new  men  at  fires  and  determine  whether  they  will  make  success- 
ful firemen.  Once  appointed,  they  should  be  made  secure  in 
their  positions  during  good  behavior  and  efficient  service. 

For  retirement,  the  National  Board  has  recorhmended 
that  members  be  retired  from  active  duty  on  reaching  the  age 
of  sixty-two  years,  unless  at  that  time  they  are  unusually  effi- 
cient. Sixty-two  years  is  the  age  for  retirement  from  the  United 
States  Army  and  Navy.  The  exemption  from  this  rule  of  mem- 
bers of  unusual  efficiency  enables  the  department  to  avail  itself 
of  the  accumulated  experience  of  the  higher  officers,  who  should 
have  no  manual  labor  to  perform.  In  connection  with  requiring 
members  to  retire  on  account  of  age,  there  should  be  provisions 
for  pensioning  men  for  long  service  or  disability. 


22 

In  the  ordinary  full-paid  department,  the  men  will  be 
collected  in  a  comparatively  few  companies  of  sufficient  strength 
to  man  all  the  apparatus  at  the  station.  If  call  men  or  volunteers 
are  included  in  the  department,  then  enough  full-paid  men  should 
be  assigned  to  get  the  apparatus  to  a  fire  and  get  to  work.  In 
a  part-paid  engine  company,  for  instance,  the  engineer,  two 
drivers  and  one  other  member,  preferably  the  captain,  should 
be  full-paid,  so  that  at  least  two  men  will  be  on  duty  during  meal 
hours,  enough  to  get  the  apparatus  to  the  fire;  for  a  hose  or 
ladder  company,  at  least  two  men  must  be  full-paid.  This 
does  not  allow  for  days  off  or  sickness,  for  which  permanent 
substitutes  should  be  employed,  who  will  shift  from  one  company 
to  another  to  fill  in. 

For  a  full-paid  department,  the  National  Board  recommends 
that  at  least  seven  men  be  present  at  all  times  in  each  engine 
and  ladder  company  in  mercantile  and  manufacturing  districts 
and  five  men  in  other  districts.  For  hose  companies  the  men 
should  number  at  least  five  and  three,  respectively.  In  an  engine 
company  the  men  will  be  as  follows:  engineer,  one  officer,  two 
drivers  and  three  hosemen.  With  a  motor  pump  only  six  men 
will  be  required  as  the  minimum  on  duty  at  all  times. 

In  some  departments  the  drivers  are  allowed  to  stay  idly 
with  their  horses  while  the  few  hose-men  struggle  to  carry  hose 
up  stairs  and  ladders.  This  is  obviously  poor  practice  but  has 
been  a  difficult  one  to  overcome. 

The  requirement  of  seven  men  present  at  all  times  in  im- 
portant engine  companies  may  appear  low;  on  the  contrary  it 
is  rather  higher  than  obtains  in  many  cities,  as  men  get  ten  to 
fifteen  days  annual  vacation,  four  to  seven  days  off  per  month, 
and  three  or  four  hours  for  meals.  Consider  a  fourteen-man 
company,  where  men  get  two  weeks'  vacation,  one  day  off  in 
five  and  three  hours  daily  for  meals,  a  common  arrangement. 
During  a  large  part  of  the  time  one  man  is  on  vacation  and  three 
on  days  off,  leaving  ten  on  duty  for  the  day;  then  during  three 
hours  the  company  is  reduced  to  six  men  and  during  six  hours 
to  seven  men,  if  men  go  in  three  shifts. 

The  movement  for  organizing  fire  departments  on  the  two- 
platoon  or  two-shift  plan  has  attained  considerable  strength. 
In  cities  where  the  actual  day  strength  of  companies  is  about 
one-half  the  paper  strength,  the  two-platoon  plan  would  appar- 
ently not  appreciably  decrease  the  effective  force,  and  it  appears 
that  the  total  strength  available  for  serious  fires  may  be  even  greater 
than  with  the  single-shift  plan,  if  proper  provision  is  made  for 
their  notification  and  response  on  second  and  greater  alarms; 
objections  raised  by  fire  chiefs  to  the  two-platoon  system  are 
mainly  that  discipline  will  be  affected  and  that  the  men  will 
be  in  poorer  condition  for  the  service,  particularly  those  on  night 
shift.  There  may  be  considerable  force  to  these  objections  in 
departments  where   conditions  render  it  difficult  to  maintain 


23 

discipline  in  any  case;  by  a  strict  enforcement  of  the  rules,  as 
in  Omaha,  in  which  city  the  two-platoon  system  has  been  in 
existence  since  1907,  they  appear  to  have  been  mainly  eliminated. 
More  serious  objections  are  the  lack  of  men  for  inspection  work 
and  the  increased  cost  of  such  a  system,  amounting  to  about 
one-third  more  than  the  single-shift  system ;  this  last  may  result 
in  a  decrease  in  other  expenditures  desirable  to  meet  the  natural 
growth  of  the  city. 

The  number  of  paid  men  per  thousand  of  population  in 
the  larger  cities  of  this  country  averages  about  1.25,  ranging 
from  0.75  to  1.5,  depending  upon  the  density  of  the  population, 
the  extent  of  the  high  values  to  be  protected  and  the  financial 
condition  of  the  city.  These  men  are  organized  in  companies 
having  about  12  members,  either  for  an  engine  company  or  a 
ladder  company,  with  usually  only  one  or  two  companies  in  a 
house.  An  interesting  comparison  on  this  point  is  the  practice 
in  Europe,  where  companies  are  grouped ;  the  County  of  London 
has  a  fire  force  of  1,365,  for  a  population  of  4,873,000,  or  a  ratio 
of  0.28  per  thousand  of  population.  These  men  are  organized 
into  a  total  of  82  companies,  with  an  average  of  16  men  per 
company.  Similar  figures  for  Berlin,  Germany,  show  a  total 
of  1,040  men,  organized  into  20  companies,  fora  total  of  2,123,000, 
population  with  a  ratio  of  0.49  per  thousand  population  and  52 
men  per  company.  For  Milan,  Italy,  the  figures  given  show  a 
fire  force  of  221  full  paid  men,  organized  into  6  companies,  for  a 
total  of  580,000  population,  with  a  ratio  of  0.38  per  thousand 
population  and  37  men  per  company. 

Since  the  salaries  paid  in  this  country  are  much  higher 
than  those  paid  abroad,  the  per  capita  cost  for  maintenance  is 
still  further  out  of  proportion.  The  salaries  paid  the  various 
grades  of  firemen  in  the  larger  cities  of  the  United  States  range 
from  $900  to  $1,400  a  year  and  the  per  capita  expense  will  average 
over  $1.50  with  a  maximum  of  over  $2.50.  In  London,  the  yearly 
pay  will  range  from  about  $300  to  $450,  with  clothing  in  addition; 
the  per  capita  maintenance  expense  of  the  fire  department  is 
27  cents.  In  Berlin,  Germany,  the  per  capita  expense  of  mainte- 
nance is  26  cents,  and  in  Milan,  Italy,  about  29  cents. 

In  considering  the  number  and  location  of  companies, 
the  topography,  street  paving  and  general  character  of  the  city 
must  be  considered;  Pittsburgh  and  Cincinnati  require  a  con- 
siderably larger  number  of  companies  than  do  some  other  large 
cities  not  having  such  steep  grades  and  more  compactly  built. 
The  introduction  of  automobile  apparatus  has  offset  some  of  the 
disadvantages  resulting  from  uneven  topography  and  also  in- 
fluences the  number  of  companies  through  making  aid  from  sur- 
rounding communities  more  readily  available;  in  this  last 
respect  it  is  considered  that  any  needed  department  strength, 
over  that  necessary  for  proper  local  distribution,  which  must  be 


24 

provided  to  handle  a  serious  fire  in  the  congested  value  districts 
may  be  offset  to  a  large  extent  by  the  outside  aid  available 
within  30  minutes. 

For  proper  quickness  in  response  it  is  estimated  that  with 
automobile  apparatus,  an  engine  or  hose  company  should  be 
within  three-quarters  of  a  mile  of  every  point  in  high  value 
districts  and  a  ladder  company  within  one  mile;  in  residential 
districts  about  twice  these  distances  will  give  satisfactory  service ; 
for  horse-drawn  apparatus  the  distances  should  be  two-thirds 
those  given  above. 

The  equipment  for  a  department  is  largely  dependent  upon 
the  topography  of  the  city,  the  character  of  the  buildings  and 
condition  of  the  water  supply.  Where  the  water  works  system 
is  so  designed  as  to  supply  an  ample  supply  of  water  at  a  mini- 
mum hydrant  pressure  during  draft  of  seventy-five  pounds  or 
over,  the  fire  department  can  be  kept  upon  a  direct  hydrant 
stream  basis  until  buildings  of  over  four  stories  begin  to  be 
numerous.  One  or  more  engines  in  service  or  in  reserve  may  be 
desirable  to  protect  the  higher  buildings  or  those  too  far  from 
the  hydrants  for  effective  hydrant  streams;  for  cities  of  over 
30,000  population,  it  is  advisable  to  have  about  one-third  the 
companies  provided  with  engines,  to  furnish  the  more  powerful 
streams.  Frequently  some  of  the  residential  sections  will  be 
at  considerably  higher  elevations  than  the  business  district  and 
companies  in  these  localities  must  be  equipped  with  fire  engines. 

Chemical  apparatus  should  be  the  main  reliance  for  ordinary 
fires;  in  some  cities,  75  per  cent,  or  more  of  the  actual  working 
fires  are  controlled  by  chemical  streams.  In  recent  practice 
the  automobile  combination  chemical  and  hose  wagon  has  been 
found  an  exceedingly  valuable  apparatus  and  is  largely  super- 
seding both  the  horse-drawn  combination  wagon  and  the  straight 
chemical. 

Steam  fire  engine  construction  has  become  quite  well  stand- 
ardized and  these  machines  have  reached  a  comparatively 
high  degree  of  reliability.  However,  the  application  of  the  gaso- 
lene motor  to  fire  service  offers  such  advantages  that  in  the  past 
year  or  two  comparatively  few  steam  fire  engines  have  been  sold, 
and  many  of  these  have  been  equipped  with  motor  tractors  to 
replace  horses. 

The  earlier  types  of  gasolene  pumping  engines  were  adapta- 
tions of  touring  cars  or  commercial  trucks;  the  hard  service 
required  of  such  apparatus  in  pumping  and  in  running  over  all 
kinds  of  roads,  often  in  the  hands  of  men  poorly  trained  for  the 
service,  introduced  conditions  more  severe  than  the  machine 
could  withstand.  The  defects  developed  by  these  earlier  pieces 
of  apparatus  are  being  gradually  eliminated  by  a  careful  design 
along  the  special  lines  necessary  for  such  service. 

In  regard  to  the  pump,  for  all  except  village  service,  two 
good  fire  streams  should  be  available  under  ordinary  working 


25 

conditions,  which,  with  the  modern  use  of  hose  with  smooth 
hning  and  nozzles  of  good  size  and  discharging  capacity,  means 
an  actual  delivery  of  about  500  to  600  gallons.  With  all  pumping 
apparatus  the  slip  may  be  expected  to  increase  with  use  and  other 
conditions  will  tend  to  reduce  the  capacity  of  the  pump,  so  that 
a  capacity  of  700  gallons  is  not  too  much  for  most  cases,  and  for 
metropolitan  service  even  larger  capacity  may  be  desirable. 
City  service  at  serious  fires,  when  the  maximum  engine  capacity 
is  needed,  will  most  often  call  for  such  lengths  of  hose  lines  and 
sizes  of  nozzles  as  to  require  an  engine  pressure  of  120  to  150 
pounds,  with  pressure  up  to  about  200  pounds  or  more  for  fires 
in  high  buildings  or  for  suburban  service. 

Various  types  of  pumps  have  been  used,  and  there  are  a 
number  of  different  methods  of  connecting  the  pump  to  the 
engine.  The  types  in  use  include  reciprocating  piston  pumps, 
both  single  and  double-acting,  rotary  cam  or  gear  pumps,  and 
pumps  of  centrifugal  or  turbine  design,  either  of  multi-stage  or 
with  two  or  more  single-stage  pumps  working  in  series.  Machines 
embodying  each  type  of  pump  have  been  successfully  developed. 
Reciprocating  pumps  usually  require  a  more  complicated  power- 
transmission  system  than  the  others,  and  to  work  successfully 
with  the  range  of  pressure  desired,  have  been  provided  with 
transmission  permitting  two  speeds;  this  type  of  pump  is, 
however,  reliable,  efficient  and  easily  kept  in  good  condition, 
if  properly  designed  and  given  competent  attention.  The 
rotary  pump,  because  of  its  compactness  and  the  simphcity 
with  which  power  may  be  transmitted  to  it,  is  well  adapted  to 
this  service;  some  of  the  early  makes,  however,  were  not  well 
designed  for  efficiency,  and  others  were  not  able  to  operate  at 
high  pressure;  the  wear  resulting  from  service,  unless  properly 
cared  for  in  the  design,  will  occasion  high  slip  and  impair  effi- 
ciency. 

Although  used  extensively  in  Europe,  the  centrifugal  pump 
was  not  at  first  successfully  developed  for  the  extreme  range 
of  fire  service  required  in  this  country.  Though  handicapped 
to  a  slight  extent  by  the  need  of  some  special  priming  device 
to  secure  suction  for  the  pump,  the  advantages  of  this  type  of 
pump  were  sufficiently  great  to  interest  several  designers,  and 
one  fire  apparatus  manufacturer  has  adopted  this  type  as  its 
standard;  its  ability  to  withstand  hard  usage,  its  simplicity 
and  ease  of  repair  and  its  property  of  automatically  regulating 
discharge  and  pressure  are  features  tending  to  make  it  a  most 
desirable  type  for  fire  service. 

With  any  type  of  pump,  the  requirements  desirable  for 
fire  service  are  flexibility  of  operation,  that  is,  ability  to  operate 
over  a  wide  range  of  pressure  and  the  power  required  for  good 
fire  fighting;  the  National  Board  has  recommended  that  the 
test  be  such  as  to  obtain  the  full  rated  capacity  of  the  pump 
for  two  hours  against  a  net  pressure  of  120  pounds  and  one-half 


26 

of  the  rated  capacity  for  one  hour  against  a  net  pressure  of  200 
pounds;  in  some  cases  this  last  clause  is  changed  to  provide 
for  a  half -hour  run  at  one-half  capacity  and  200  pounds  net 
pressure  and  a  half-hour  run  at  one-third  capacity  and  250 
pounds  net  pressure. 

There  are  a  number  of  automobile  pumping  engines  now 
on  the  market  which  compare  well  in  point  of  reliability  with 
the  steam  fire  engines,  but  there  are  other  makes  which  have 
not  passed  the  experimental  stage  and  have  not  proved  their 
ability  to  operate  successfully  for  long  periods  and  under  the 
varying  conditions  of  fire  service. 

The  ideal  equipment  for  an  engine  company  in  a  city  able 
to  afford  it  consists  of  two  pieces,  a  pumping  engine  and  combined 
chemical  engine  and  hose  wagon,  the  latter  ordinarily  known 
as  a  combination  wagon.  A  good  arrangement  in  small  or  medium 
sized  cities  is  to  have  about  half  the  companies  equipped  as 
above,  which  will  furnish  adequate  chemical  service,  and  the 
other  half  equipped  with  combined  pumping  engine  and  hose 
wagon.  This  latter  piece  of  apparatus  must,  of  course,  be  so 
manipulated  at  a  fire  that  after  the  one  or  two  hose  lines  needed 
are  stretched  from  the  hydrant  to  the  burning  building,  the 
engine  will  reach  the  hydrant  and  connect  its  suction  as  quickly 
as  possible;  there  will  naturally  be  somewhat  more  delay  than 
if  a  separate  engine  and  hose  wagon  are  provided,  but  this  delay 
should  not  be  more  than  two  or  three  minutes  in  most  cases, 
even  when  two  lines  of  hose  are  laid,  as  shown  by  tests  of  a 
crew  trained  to  the  work. 

The  triple  combination,  as  it  is  usually  called  by  manu- 
facturers, consists  of  a  combination  of  pumping  engine,  chemical 
tank  and  hose  body.  Most  fire  chiefs  are  agreed  that  this  piece 
of  apparatus  is  not  a  desirable  one  for  general  installation,  for 
the  obvious  reason  that  its  use  in  furnishing  chemical  service 
precludes  its  pumping  from  a  hydrant  or  other  source  of  water 
supply,  at  least  without  considerable  delay  at  what  is  likely 
to  be  a  critical  moment;  and  also  for  the  further  reason  that 
too  much  equipment  is  carried  on  one  set  of  wheels  and  is  lost 
to  service  in  case  of  disablement.  However,  it  has  a  place  in 
localities  where  the  pump  is  very  seldom  needed,  as  for  instance, 
in  cities  where  the  water  pressure  is  sufficient  in  most  sections 
for  effective  direct  hydrant  streams,  but  there  are  occasional 
high  elevations  or  weak  spots  on  the  water  distribution  system 
and  the  ordinary  hydrant  pressure  is  inadequate.  It  will  also 
take  the  place  of  a  reserve  engine  for  use  at  serious  fires  in  high 
value  districts. 

The  main  points  to  be  considered  in  purchasing  automobile 
hose  wagons  are  believed  to  be  covered  by  the  recommendation 
included  in  most  of  the  National  Board  reports,  as  follows : 

Automobile  hose  wagons  to  have  divided  hose  bodies  with 
a  capacity  of  at  least  1,000  feet  of  hose  when  carrying  equal 


27 

amounts  of  23^-mch  and  3-inch  hose.  Motors  to  be  capable 
of  attaining  a  speed  of  30  miles  an  hour,  and  of  covering  20  miles 
in  an  hour  over  paved  or  macadamized  streets  having  such 
grades  as  the  apparatus  is  likely  to  encounter  in  service. 

Most  of  the  earlier  automobile  fire  apparatus  was  fitted 
with  pneumatic  tires,  and  some  of  it  is  still  so  equipped;  but 
some  f oi-m  of  solid  or  cushion  tire  has  come  to  be  considered  by 
most  fire  chiefs  and  manufacturers  as  preferable,  from  the 
standpoint  both  of  safety  and  economy. 

The  question  of  hose  is  often  one  requiring  considerable 
argument  on  the  part  of  the  chief  to  convince  the  city  fathers  of 
the  need  of  money  for  an  adequate  supply;  in  addition  to  the 
hose  on  each  wagon  in  service,  a  complete  extra  shift  should 
be  provided  at  each  house  in  order  that  after  use  it  may  be  shifted, 
cleaned  and  dried.  If  not  used,  hose  should  be  shifted  on  the 
wagons  at  least  every  two  weeks,  in  order  to  prevent  mildew  and 
cracking  of  the  lining. 

In  case  hose  is  burned  or  otherwise  destroyed,  or  for  large 
fires  where  wagons  must  come  back  to  reload,  the  reserve  hose 
is  also  needed.  Investigation  shows  that  the  average  hose  lines 
in  city  fire  department  practice  are  somewhat  over  400  feet 
in  length;  therefore,  to  provide  two  average  lines  each  wagon 
should  carry  about  1,000  feet  of  hose.  For  wagons  accompany- 
ing large  engines  able  to  pump  over  800  gallons,  or  for  outlying 
districts  where  long  lines  are  common,  1,200  to  1,400  feet  are 
better,  making  three  ordinary  lines  or  one  long  line  for  places 
at  a  distance  from  hydrants. 

Good  quality  hose  should  have  a  life  of  about  7  years,  and 
annual  purchases  should  be  made  on  the  basis  of  replacing  all 
hose  every  7  years.  That  over  5  years  old  should  be  transferred 
to  the  outlying  companies,  so  that  in  sections  where  a  burst 
line  would  have  serious  results  there  will  be  only  new  hose. 

The  23/2-i^ch  hose  is  best  adapted  for  regular  use,  but  if 
long  lines  are  laid  or  large  streams  required,  the  3-inch  size  is 
better.  With  a  standard  l3/8-inch  fire  stream  flowing,  the 
friction  loss  in  good  23^-inch  hose  is  fifteen  pounds  per  100 
feet.  Thus  with  800  feet  of  23^-inch  hose,  120  pounds  pressure 
is  needed  to  overcome  friction  and  45  pounds  for  the  nozzle 
pressure,  so  the  engine  must  work  at  165  or  170  pounds.  If  hose 
is  attached  to  a  hydrant,  the  pressure  is  limited  probably  to  80 
or  90  pounds  and  larger  hose  or  more  lines,  siamesed,  must  be 
used  to  produce  a  stiff  stream.  Three-inch  hose  will  convey  the 
same  quantity  of  water  over  two  and  one-half  times  as  far  as 
23/2-i^ch  hose,  with  the  same  friction  loss ;  for  a  standard  1 3^-inch 
stream  with  800  feet  of  3-inch  hose  only  94  pounds  pressure  will 
be  needed  at  the  engine  or  hydrant.  By  laying  two  lines  and 
siamesing  into  one  near  the  nozzle,  the  friction  loss  may  be  still 
further  reduced,  to  about  one-fourth  the  loss  with  a  single  line. 
In  other  terms,  108  pounds  engine  pressure  will  push  a  250-gallon 


28 

13/8-inch  stream  through  400  feet  of  23/^-inch  hose,  or  1,000  feet 
of  3-inch  hose,  or  1,500  feet  of  23^-mch  hose  siamesed.  Three- 
inch  hose  is  heavy  and  stiff  and  not  adapted  for  ordinary  use 
in  buildings  or  on  ladders,  so  the  best  practice  is  to  arrange  the 
hose  in  wagons  in  two  sections  so  that  the  200  to  300  feet  next 
the  hydrant  shall  be  3-inch  and  the  rest,  which  may  have  to  be 
moved  about,  shall  be  2}/2-\nc\\.  The  National  Board  has  made 
the  following  recommendations:  That  each  hose  wagon  shall 
carry  at  least  200  feet  of  3-inch  hose  for  outside  leads.  For 
high  value  districts,  that  eventually  each  wagon  shall  carry 
equal  amounts  of  23^  and  3-inch  hose,  in  two  sections. 

Where  23^^  and  3-inch  hose  are  in  use  it  has  been  found  a 
great  convenience  to  equip  the  3-inch  hose  with  23x^-inch 
couplings,  in  order  to  eUminate  delays  from  mislaid  reducers 
and  varying  couplings.  Contrary  to  general  impression,  the 
use  of  smaller  couplings  does  not  appreciably  affect  the  friction 
loss,  so  that  for  ordinary  fire  streams  the  difference  in  pressures 
from  straight  3-inch  hose  or  3-inch  hose  with  23/^-inch  couplings 
is  not  noticeable.  Therefore  the  National  Board  has  recom- 
mended that  both  23^2  and  3-inch  hose  be  equipped  with  23^-inch 
National  Standard  couplings,  properly  beveled. 

Annual  tests  of  all  hose  over  two  years  old,  and  of  any 
others  that  show  defects,  should  be  made,  with  a  test  pressure 
of  200  pounds. 

For  use  at  serious  fires,  where  additional  lines  are  needed, 
many  departments  maintain  their  spare  hose  rolled  and  ready 
for  quick  loading  on  any  wagon  which  may  be  sent  back  for  it. 
Of  greater  value  is  a  loaded  reserve  hose  wagon,  preferably 
carrying  3-inch  hose,  kept  in  some  fire  station  centrally  located 
with  respect  to  the  high  value  districts.  This  wagon  should  have 
a  turret  pipe,  to  give  powerful  streams;  and  in  addition  to  this, 
a  sufficient  number  of  other  apparatus  should  have  turret  pipes, 
deluge  sets  and  cellar  pipes  to  permit  the  use  of  a  sufficient 
number  of  good  streams  to  hold  a  spreading  fire. 

Cities  having  buildings  over  four  stories  high  must  make 
some  provisions  for  fighting  the  fires  in  the  upper  stories.  The 
use  of  building  standpipes  for  this  purpose,  either  from  the  lower 
floor  of  the  same  building  or  from  a  building  across  a  court  or 
narrow  street,  is  recognized  as  being  good  practice,  but  in  addi- 
tion to  this  some  apparatus  must  be  provided  for  use  where 
standpipes  are  not  available.  In  smaller  cities,  a  ladder  pipe 
attached  to  the  aerial  ladder  gives  good  service,  and  if  equipped 
with  3-inch  hose  for  the  ladder  lead,  with  a  Siamese  at  the  lower 
end,  streams  up  to  2-inch  can  be  used,  if  the  ladder  is  provided 
with  a  proper  locking  device.  For  the  larger  cities  a  water 
tower  is  necessary,  and  in  some  cities  such  apparatus  is  called 
on  first  alarms;  its  response  should  be  provided  for  on  the  run- 
ning card  in  every  case,  and  frequent  drills  should  be  had  with 
it  to  familiarize  the  men  with  its  proper  handling. 


29 

Extensive  minor  equipment  is  a  necessity  for  any  up-to-date 
department;  in  general,  most  of  this  is  carried  on  the  ladder 
trucks,  as  it  is  the  duty  of  the  ladder  men  to  use  it;  however, 
hose  wagon  equipment  should  be  sufficiently  complete  to  permit 
the  men  on  the  wagon  to  work  independently  of  the  ladder 
trucks  for  all  residential  and  other  small  fires.  Besides  a  com- 
plete set  of  nozzles,  including  both  shut-off  and  open  tips  from 
J/g  to  13^ -inches  in  diameter,  suitable  forcible  entry  tools,  chemi- 
cal extinguishers  and  short  ladders  should  be  carried  on  each 
hose  wagon.  Ladder  trucks  and  most  of  the  hose  wagons  should 
carry  salvage  appliances,  particularly  waterproof  covers. 

The  question  of  suitable  fire  stations  does  not  ordinarily 
affect  fire  service  directly;  poor  arrangement  for  the  apparatus, 
narrow  streets  in  which  to  turn  out  and  improper  locations  of 
sliding  poles,  etc.,  are  features  sometimes  found.  Unsanitary 
arrangements  and  dilapidated  buildings  affect  the  health  and 
spirits  of  the  men  to  a  certain  extent  and  should  be  corrected. 

Repair  facilities  are  necessary  for  the  proper  upkeep  of 
apparatus,  particularly  in  the  larger  cities  where  apparatus  gets 
considerable  use.  It  is  better  to  have  this  handled  by  the  depart- 
ment, and  in  many  places  all  minor  repairs  are  made  by  the 
men  while  about  the  house.  A  good  supply  of  spare  parts  is 
becoming  of  great  importance  with  the  general  use  of  automobile 
apparatus.  To  take  the  place  of  apparatus  being  repaired,  it  is 
necessary  to  provide  a  certain  amount  of  spare  pieces,  and  this 
is  also  of  greater  moment  with  a  department  equipped  with 
automobiles.  It  is  estimated  that  provisions  should  be  made  to 
have  at  least  one  fire  engine  out  of  ten  in  reserve,  with  one  out 
of  five  for  automobile  pumping  engines;  for  hose  wagons,  the 
.number  in  reserve  would  be  one  in  fifteen  and  one  in  ten,  respec- 
tively, for  horse-drawn  and  automobile. 

In  the  purchase  of  new  apparatus,  particularly  pumping 
engines,  adequate  tests  should  be  made,  and  similar,  though 
not  so  severe,  tests  of  repaired  apparatus.  For  pumping  engines, 
these  tests  should  be  along  the  lines  of  those  conducted  by  the 
engineers  of  the  National  Board  of  Fire  Underwriters.  In 
these  tests,  each  engine  is  run  for  tw^enty  minutes  or  more,  under 
such  conditions  as  would  be  met  with  at  a  serious  fire ;  the  speed 
is  noted  and  actual  discharge  measured  by  means  of  Pitot 
tube  and  gage.  By  means  of  this  test,  there  may  be  determined 
the  capacity  and  condition  of  the  engine,  the  ability  of  the 
engineer  and  the  quality  of  the  fuel,  and  the  value  of  the  test 
consists  largely  in  demonstrating  to  fire  department  officials 
the  actual  condition  of  the  engine  and  the  best  methods  of 
correcting  such  defects  as  are  disclosed;  such  tests  have  so 
commended  themselves  to  a  number  of  fire  departments  as 
to  be  adopted  as  part  of  their  regular  operation.  A  pamphlet 
has  been  issued  by  the  National  Board  describing  methods  of 


30 

testing  and  appliances  necessary,  and  copies  of  this  pamphlet 
have  been  distributed  to  members  of  fire  departments  all  over 
the  country. 

This  pamphlet  contains  also  tables  showing  friction  loss 
in  hose,  and  the  pressures  necessary  at  engine  or  hydrant  to 
maintain  given  nozzle  pressures  with  various  lengths  of  23^ 
and  3-inch  hose.  These  tables  demonstrate  strikingly  the 
futility  of  long  lines  of  23^-inch  hose  and  the  advantages  of  using 
siamesed  lines  and  3-inch  hose  where  heavy  streams  are  required. 

Discipline  greatly  affects  the  general  condition  of  a  depart- 
ment and  is  in  itself  greatly  affected  by  political  influence  in 
many  cities;  semi-military  discipline  is  usually  exacted,  includ- 
ing proper  deference  to  superior  officers.  In  volunteer  depart- 
ments the  lack  of  discipline  is  very  noticeable  and  often  results 
in  serious  loss;  fortunately  it  is  rather  uncommon  for  the  lack 
of  discipline  to  be  so  marked  today  as  in  the  past  and  resulted 
in  companies  fighting  each  other  instead  of  the  fire. 

The  required  response  of  apparatus  to  any  fire  also  depends 
upon  the  character  of  the  city.  In  general,  every  alarm  should 
be  considered  as  indicating  a  serious  fire,  and  the  response 
made  accordingly;  in  many  cities,  only  one  company  is  sent 
to  answer  a  telephone  alarm,  the  chief  arguing  that  in  nearly 
every  case  such  an  alarm  has  been  for  a  fire  which  could  be 
handled  by  one  company  and  that  it  is  not  well  to  send  more 
apparatus  than  is  needed.  This  contention  is  obviously  erro- 
neous, as  alarms  for  many  extensive  fires  are  first  sent  in  by 
telephone.  As  a  general  rule,  at  least  two  engine  or  hose  com- 
panies should  respond  to  every  alarm  of  fire,  not  only  because 
both  may  be  needed  immediately  upon  arrival,  but  also  to  off- 
set the  probability  of  no  apparatus  arriving  because  of  an 
accident.  In  high  value  districts,  as  values  and  congestion 
increase,  the  response  should  be  strengthened;  in  New  York, 
to  many  of  the  down-town  boxes,  five  engines  respond  on  first 
alarms,  and  an  average  of  four  for  each  succeeding  alarm. 
One  or  more  ladder  trucks  should  be  sent  to  all  sections  having 
buildings  which  cannot  be  reached  by  the  ladders  on  the  hose 
wagons.  To  get  a  uniform  response,  a  properly  prepared  running 
card  is  essential,  with  provisions  for  companies  to  fill  in  vacated 
houses  or  cover  territory  left  without  apparatus.  It  some- 
times happens  that  response  may  be  too  heavy,  too  many  of 
the  companies  going  out  to  leave  proper  protection  against  a 
second  fire;  this  is  particularly  likely  in  a  volunteer  depart- 
ment. 

No  feature  of  fire  department  operations  offers  a  more 
interesting  field  for  study  than  those  of  drills  and  training 
and  of  fire  methods;  by  means  of  the  former  the  men  are  kept 
in  good  physical  condition,  and  prompt  and  proper  action 
is  secured.  A  number  of  the  iDcst  departments  maintain  drill 
schools  where  new  members  are  sent  for  a  regular  course  of 


31 

instruction,  and  details  from  the  different  companies  drill  at 
regular  intervals  to  maintain  their  proficiency.  It  is  recognized 
today  that  to  enable  proper  drills  to  be  held,  a  drill  tower, 
equipped   with    the   necessary   appliances,    must    be   provided. 

The  methods  employed  in  extinguishing  fires  vary  some- 
what in  different  cities,  and  there  is  a  wide  variation  in  some 
respects  between  practice  in  this  country  and  abroad.  Herr 
Reichel,  the  head  of  the  fire  department  of  Berlin,  Germany, 
has  recently  been  quoted  as  saying  that  American  fire  depart- 
ments are  ''extinguishing  organizations,  pure  and  simple;" 
and  if  this  is  so,  it  is  largely  because  there  are  seldom  any  laws 
or  ordinances  which  permit  them  to  be  anything  else  —  to  take 
up  the  other  functions  of  fire  prevention,  the  discovery  and 
elimination  of  fire  hazards  and  looking  after  the  installation 
of  devices  to  prevent  the  spread  of  fire.  In  some  cities,  a  be- 
ginning has  been  made  in  this  direction;  in  others,  fire  chiefs 
have  been  able,  through  personal  popularity  or  the  assumption 
of  authority,  to  secure  considerable  improvements,  even  without 
the  aid  of  adequate  regulations,  but  this  is  hardly  feasible  in 
the  larger  cities. 

The  existence  and  continuance  of  conditions  tending  to 
produce  a  high  conflagration  hazard  have  thus  made  necessary 
the  development  of  the  purely  extinguishing  function.  With 
the  increase  in  extent  and  in  hazard  of  high  value  districts, 
there  comes  an  increasing  demand  for  fire-boats  and  high  pres- 
sure systems,  to  check  the  spread  of  serious  fires  and  prevent 
conflagrations. 

Nearly  all  fire  departments  use  chemical  streams  to  a  greater 
or  less  extent,  some  of  them  from  straight  chemical  engines, 
more  often  from  combination  chemical  and  hose  wagons;  these 
chemical  lines,  for  use  inside  buildings,  are  backed  up  by  lines 
of  large  hose,  with  shut-off  nozzle  or  controlling  nozzle  to  avoid 
water  damage.  For  outside  lines,  23^-inch  and.  sometimes 
3-inch  hose  is  used,  usually  with  IJ/g-inch  or  IJ^-inch  nozzles. 
There  is  an  increasing  tendency  towards  the  use  of  deluge  sets, 
turret  nozzles,  and  water  towers  for  spreading  fires,  with  nozzles 
13^  to  2  inches  in  diameter,  sometimes  even  larger.  One  of 
our  engines  is  seldom  expected  to  furnish  more  than  two  streams 
from  Ij/g  or  IJ^-inch  nozzles,  whereas  the  practice  in  some 
foreign  countries  is  to  run  out  from  two  to  five  lines  from  an 
engine  of  not  more  than  half  the  capacity  of  an  American  engine. 
These  streams  are,  of  course,  used  inside  and  close  to  the  fire 
where  possible,  and  structural  conditions  and  hazards  tending 
to  result  in  serious  fires  are  comparatively  rare ;  however,  a 
comparison  of  statistics  indicates  that  while  the  number  of 
fires  per  thousand  of  population  is  very  much  less  in  Europe  than 
in  this  country,  the  loss  per  fire  in  many  foreign  cities,  most 
of  those  in  Germany  being  notable  exceptions,  is  as  high  or 
higher  than  in  our  own  cities. 


32 

Salvage  work  has  in  the  past  been  left  largely  to  the  insur- 
ance interests,  but  this,  as  well  as  fire  extinguishment  and  fire 
prevention,  is  being  taken  up  by  some  departments.  Besides 
the  steps  taken  to  reduce  water  damage  by  the  use  of  chemical 
streams  and  shut-off  nozzles,  companies  should  carry  and  spread 
covers  to  protect  goods,  and  clean  up  after  fires. 

The  fire  alarm  system  has  been  properly  called  the  right 
arm  of  the  fire  department,  as  the  promptness  and  accuracy 
of  its  notification  largely  determines  the  extent  of  the  fire.  A 
brief  description  of  the  main  features  is  therefore  pertinent. 

In  1851,  the  question  of  utiHzing  the  inventions  of  Morse 
telegraphy  for  the  sounding  of  fire  alarms  was  taken  up  and 
apparatus  invented  by  which  tower  bells  could  be  sounded  from 
stations  distributed  throughout  the  city.  The  modern  fire 
alarm  system  has  been  developed  from  this  beginning.  The 
boxes  contain  clock-work  which  actuates  a  figure-wheel  and 
is  connected  by  an  electric  circuit  to  a  headquarters  or  central 
office.  Each  box  has  its  own  number,  which  is  transmitted 
through  headquarters  to  the  various  fire  stations  and  designates 
the  locality  of  the  fire.  From  headquarters,  alarms  are  trans- 
mitted either  manually  or  automatically.  In  the  former  case, 
the  box  number  is  received  by  operators  at  headquarters  and 
sent  out  over  circuits,  distinct  from  those  containing  boxes, 
either  by  a  Morse  key  or  a  special  transmitter.  This  type 
of  system  is  best  suited  to  large  cities  where  two  fires  are  apt 
to  occur  at  about  the  same  time,  or  where  a  number  of  boxes 
may  be  pulled  for  one  fire;  accuracy  and  speed  depend  to  a 
very  great  extent  upon  the  operator.  In  the  automatic  system, 
alarms  are  transmitted,  at  headquarters,  by  a  repeater  which 
receives  an  alarm  from  a  box  on  one  circuit  and  sends  it  over 
the  other  box  circuits,  and  in  some  cases  over  special  circuits, 
to  the  various  fire  stations  without  manual  intervention  or 
assistance.  This  type  of  system  is  for  use  in  the  smaller  places, 
where  cost  of  maintenance  is  an  important  factor  and  simul- 
taneous alarms  are  infrequent. 

Proper  design  and  maintenance  require  that  every  box 
alarm  will  be  received  at  headquarters  and  recorded  automati- 
cally. It  is  of  more  or  less  common  occurrence  for  a  number 
of  boxes  to  be  pulled  for  the  same  fire,  or  for  alarms  for  two  or 
more  fires  to  come  in  simultaneously,  either  over  the  same  or 
separate  circuits;  this  condition,  in  connection  with  the  above 
requirement,  calls  for  rather  complicated  central  office  equip- 
ment, and  for  boxes  of  the  type  known  as  non-interfering  and 
successive. 


33 

Fire  alarm  telegraphy  is  a  specialized  subject  with  which 
comparatively  few  engineers  are  familiar,  but  one  which  is  at 
the  present  time  receiving  a  much  greater  degree  of  attention 
than  it  has  in  the  past,  especially  in  a  number  of  the  larger  cities 
where  the  increase  of  complications  with  growth  has  required 
special  study. 


Vv  oodw^orkers 

BY 

H.  E.  BURDETTE 

January  15,  1915 

Last  year  I  had  the  pleasure  of  reading  a  paper  to  you  on 
the  general  subject  of  woodworkers.  It  is  unfortunate  that  I 
selected  that  special  hazard  as  this  year's  course  requires  that 
this  particular  subject  be  taken  up,  and  those  of  you  who  plan 
to  take  the  examinations  for  the  second  year  work  will  be  required 
to  answer  questions  on  woodworkers.  On  that  account  I  have 
been  asked  to  review  the  subject  tonight. 

The  woodworking  class  is  a  large  one,  and  includes  such  a 
number  of  sub-divisions  that  at  best  we  could  only  touch  upon  it 
briefly  in  one  evening. 

To  start  in  with,  let  us  review  hurriedly  the  more  important 
points  covered  in  last  year's  paper.  I  will  state  here  that  the 
lectures  delivered  to  you  last  year  are  being  printed,  so  I  refer 
you  to  those  papers  for  more  detail. 

You  will  recall  that  we  divided  woodworkers  into  two  sec- 
tions —  hardwood  and  softwood  factories.  The  working  of  hard- 
wood is  ordinarily  less  hazardous  than  the  working  of  softwood, 
principally  because  the  hardwood  is  more  valuable,  and  therefore 
is  handled  more  carefully. 

In  all  Inspection  Bureaux  reports  you  will  find  among  others, 
two  headings;  that  is  ''Common  Hazards''  and  ''Special  Haz- 
ards.'' Under  "Common  Hazards"  you  will  find  described  the 
heating  system,  lighting  system  and  power  plant,  including  the 
boilers,  engines,  dynamos,  et  cetera.  In  last  year's  paper  we 
included  under  this  heading  of  "Common  Hazards"  the  care  of 
sweepings,  oily  waste,  et  cetera,  whereas  the  Bureaux  reports 
usually  cover  this  under  a  separate  heading  such  as  Care  and 
Cleanliness,  or  Housekeeping. 

Under  "Special  Hazards"  the  Bureaux  reports,  you  will 
find,  give  a  description  of  the  processes  and  hazards  that  are 
peculiar  to  that  particular  plant  unless  it  is  a  report  on  a  class 
of  risk  that  is  so  common  that  the  "Special  Hazards"  are  known 
to  all  insurance  men. 

In  all  woodworking  plants  the  "Common  Hazards"  such  as 
lighting,  heating,  power  (development  and  transmission)  and 
care  of  rubbish  and  sweepings,  the  use  of  inflammable  liquids, 
et  cetera,  are  present. 


35 

The  ''Special  Hazards"  of  woodworking  establishments  that 
are  most  common  to  all  are  the  dry  kilns  or  dry  rooms,  the 
disposal  of  refuse,  including  the  shavings  vaults,  and  the  finishing 
hazards  including  especially  the  dip  tanks. 

Lighting:  Extreme  care  should  be  taken  to  see  that  all 
lighting  systems  are  installed  by  a  competent  mechanic  in  accord- 
ance with  the  rules  laid  down  by  the  National  Fire  Protection 
Association  and  published  by  the  "National  Board". 

The  use  of  kerosene  oil  lamps  or  lanterns  and  the  like,  also 
the  use  of  gas  for  lighting  under  ordinary  conditions  is  not 
recommended  as  it  is  almost  impossible  to  safeguard  open  flames 
in  woodworking  establishments. 

Electricity  is  recommended  and  where  electricity  is  used  the 
incandescent  lights  are  ordinarily  installed.  Where  they  hang 
from  the  ceiling  there  is  danger  of  the  bulbs  being  broken  or  of 
their  resting  against  inflammable  material.  This  would  not 
ordinarily  set  fire  to  a  flat  wooden  surface,  but  there  is  heat 
enough  to  char  a  wooden  surface,  and  possibly  under  favorable 
conditions,  to  start  a  fire;  therefore,  proper  guards  should  be 
provided  wherever  there  is  danger  of  these  bulbs  coming  in 
contact  with  stock  or  being  broken  in  use. 

In  a  heating  system  the  source  of  danger  is  ordinarily  the 
contact  of  inflammable  stock  with  hot  metal  surfaces.  Steam 
is  the  ordinary  means  of  heating  woodworking  establishments 
and  a  system  properly  installed  with  plenty  of  clearance  where 
pipes  pass  through  floors  and  partitions  is  comparatively  safe. 
The  point  to  be  looked  for  and  guarded  against  is  the  storage  of 
stock  against  these  steam  pipes,  assuming  the  system  itself  is 
properly  installed.  Quite  often  in  the  summer  time  when  the 
pipes  are  not  in  use  workmen  will  get  in  the  habit  of  disregarding 
this  danger  and  stock  will  be  piled  against  the  steam  pipes; 
then  in  the  fall  these  piles  having  become  familiar  objects  are 
overlooked  when  the  steam  is  turned  on. 

The  same  applies  to  the  hot  air  heating  systems.  All  in- 
flammable materials  should  be  kept  away  from  the  hot  air  pipes. 
The  ordinary  stove  is  now  very  seldom  used  as  a  method  of 
heating  in  an  up-to-date  woodworking  plant,  but  occasionally 
they  are  found,  especially  in  the  South  where  heat  is  needed  only 
a  few  days  in  the  year.  This  practice  should  be  discouraged  and 
an  approved  method  of  heating  provided. 

Power  :  You  will  recall  that  the  hazards  of  power  develop- 
ment are  principally  those  in  connection  with  the  boiler  plants, 
the  burning  of  the  refuse  which  the  factory  produces,  etc.  The 
Dutch  oven  is  a  common  form  of  boiler  used  in  woodworkers 
where  a  large  amount  of  refuse  is  produced.  The  shavings 
vault  and  dust  collectors  and  the  conveyor  system  for  handling 
this  refuse  were  fully  discussed  in  last  year's  paper.  The  point 
to  be  guarded  against  is  to  see  that  the  shavings  vault  is  well  cut 


36 

off  from  the  balance  of  the  plant  and  that  the  conveyor  system  is 
substantially  erected,  connected  to  all  machines  producing  dust 
and  refuse  and  where  possible  run  over  the  roofs  of  buildings 
rather  than  through  fire  walls. 

The  hazards  of  transmission  is  principally  that  of  friction 
between  fast  moving  bodies  with  an  accumulation  of  dust  held 
on  the  machine  by  the  oil  used  in  lubrication  ready  to  start 
combustion  the  moment  the  friction  of  the  parts  produce  the 
necessary  heat  to  produce  combustion.  In  connection  with 
saw  mills,  to  which  I  will  refer  later,  the  refuse  burners  will  be 
described. 

This  covers  briefly  the  common  hazards,  and  I  refer  you 
again  to  last  year's  lectures  on  "Common  Hazards"  for  further 
detail,  if  wanted. 

The  Special  Hazards  of  woodworking  plants  will  now  be 
described. 

DRY  KH^NS 

Dry  kilns  or  dry  rooms  are  found  in  nearly  every  wood- 
working establishment.  Boards  sawed  out  of  green  logs  are  run 
into  the  dry  kilns  at  the  saw  mills  where  they  are  dried.  This 
lumber  is  then  shipped  to  the  factory  manufacturing  —  say, 
for  example  —  piano  cases.  This  lumber  has  collected  more  or 
less  moisture  and  must  be  redried  before  it  is  in  shape  to  be 
worked  up  for  piano  cases.  Therefore,  a  piano  factory,  and  in 
fact  most  factories  working  lumber  have  redry  kilns  or  dry 
rooms.  Under  this  same  heading  come  the  dry  rooms  for  drying 
stock  which  has  been  glued  together. 

The  dry  kilns  and  dry  boxes  also  sometimes  called  **Caul 
Boxes"  are  simply  enclosures  usually  long  and  narrow  varying  in 
size  and  in  accordance  with  the  requirements  of  the  particular 
plant.  The  stock  is  run  into  these  rooms  on  racks  or  trucks  on  a 
track  provided  for  the  purpose.  This  track  carrying  the  trucks 
is  usually  suspended  a  few  feet  above  a  system  of  steam  coils 
which  supply  the  heat  for  drying  the  lumber.  In  the  construc- 
tion of  the  walls  and  roof  of  the  dry  rooms  or  dry  kilns  various 
channels  and  passageways  are  designed  to  cause  draughts  which 
will  carry  off  the  moisture  laden  atmosphere  produced  in  the  dry- 
ing of  lumber  so  that  dry  hot  air  can  be  kept  in  contact  with 
the  stock  as  much  as  possible. 

Many  kilns  and  dry  boxes  do  not  have  the  steam  coils  in 
the  rooms  themselves,  but  the  hot  air  is  blown  into  the  rooms 
from  the  outside. 

The  kilns  with  the  steam  pipes  at  the  bottom  or  on  the  sides 
are  the  most  common,  and  the  danger  here  lies  in  the  collection 
of  refuse,  splinters,  dust,  et  cetera,  piling  upon  the  pipes  and 
after  getting  "dry  as  tinder"  having  sufficient  heat  developed 
to  start  a  fire.  When  a  fire  is  started  in  a  room  of  this  sort  you 
can  readily  understand  that  conditions  ar£  ideal  for  a  quick 


37 

spread  and  the  production  of  a  very  hot  fire.  Therefore,  look 
out  for  the  arrangement  of  your  steam  pipes  or  other  methods  of 
supplying  heat  and  keep  the  places  clean. 

There  are  to-day  on  the  market  a  number  of  patent  dry 
kilns  using  live  steam  or  superheated  steam  instead  of  hot  air. 
The  claims  made  by  the  manufacturers  of  these  patented  devices 
is  that  the  wood  is  dried  in  a  more  natural  way  and  a  more  uni- 
form ''grain"  is  obtained.  They  claim  that  with  the  old  style 
of  drying  with  hot  air  by  steam-pipes  the  -outer  surface  of  the 
boards  being  dried,  are  hardened  to  a  greater  and  unnatural 
degree.  As  a  rule  the  designers  of  these  patented  kilns  have  taken 
into  consideration  the  fire  hazard,  and  I  think  it  is  safe  to  claim 
that  they  are  safer  than  the  ordinary  dry  kiln. 

SHAVINGS  VAULTS 

These  are  usually  built  in  connection  with  a  power  plant  as 
a  storage  house  for  refuse  material.  Ordinarily  the  refuse  consists 
of  shavings  and  sawdust  and  is  conveyed  to  the  shavings  vault 
through  metal  pipes  from  the  machines  producing  the  refuse  by  a 
current  of  air  produced  by  a  fan  located  somewhere  in  the  system 
of  pipes. 

In  addition  to  the  danger  of  fire  starting  in  this  inflam- 
mable stock  there  is  the  dust  explosion  hazard  which  will  be 
dealt  with  shortly. 

The  proper  disposal  of  dust  of  any  description  is  direct  from 
the  machine  by  which  it  is  produced  through  well  constructed 
smooth  metal  piping  or  conduits  and  exhaust  fan,  to  a  ventilated 
and  screened  centrifugal  dust  collector,  preferably  above  the 
roof  of  the  building,  and  thence  to  a  proper  receptacle,  storage 
vault  or  furnace  as  required  by  the  nature  of  the  material.  In 
woodworking  factories  the  vault  should  be  of  heavy  brick  or 
concrete  walls,  smooth  finished  inside,  with  light  non-combust- 
ible roof  and  with  vault  entrance  at  least  twelve  feet  from  boiler, 
provided  with  a  standard  vertical  self-closing  fire  door.  Chutes 
opening  into  vaults  for  disposal  of  shavings  by  hand  from  upper 
stories,  if  any,  should  be  of  brick  or  heavy  plate  iron,  and  pro- 
vided with  heavy  fire  doors  closing  by  gravity  against  the  interior 
of  chute.  Automatic  furnace  feeders  require  valves  or  dampers 
in  the  piping  to  properly  control  the  feed  to  different  fires  and  to 
divert  the  refuse  to  the  vault  when  necessary.  Dampers  or  check 
valves  opening  only  in  the  direction  of  the  air  currents  are  not  a 
sure  preventive  against  "flashback'',  but  where  installed  they 
should  be  so  constructed  that  no  clogging  by  an  accumulation  of 
waste  material  can  occur.  All  dust  and  refuse  collecting  and 
conveying  system  pipes  and  conduits  should  be  run  direct,  with 
few  turns,  and  the  passage  through  floors  and  walls  should  be 
avoided  where  possible,  as  a  breakdown  may  carry  fire  beyond  the 
limits  of  an  area. 


38 

On  the  screen  is  shown  a  standard  shavings  vault  built 
of  brick,  one  story  high  with  walls  parapetted  three  feet  or  more 
above  the  roof  of  the  surrounding  or  adjoining  buildings.  On  the 
roof  of  the  shavings  vault  is  a  cyclone  dust  collector.  This 
apparatus  is  designed  to  remove  the  dust  from  the  air  allowing 
the  dust  and  shavings  that  come  through  the  pipe  to  settle  in 
the  center  while  the  air  escapes  to  the  outside. 

The  only  opening  in  an  ordinary  shavings  vault  is  the  small 
doorway  for  the  removal  of  refuge.  This  doorway  is  usually  cut 
in  the  wall  separating  the  vault  from  the  boiler  room,  and  under 
these  conditions  it  should  be  raised  twelve  or  eighteen  inches 
above  the  boiler  room  floor. 

When  firing  by  hand  in  a  boiler  room  the  fireman  usually 
makes  use  of  a  wide  fork  with  which  he  shovels  up  the  sawdust 
in  the  vault  and  carries  it  to  the  furnace  door.  In  doing  so  natur- 
ally a  quantity  of  sawdust  and  shavings  is  scattered  from  the 
shavings  vault  door  to  the  furnace  door.  Unless  these  scatter- 
ings are  swept  up  there  is  danger  in  sparks  from  the  furnace  fall- 
ing into  them  and  then  we  have  the  condition  of  a  train  of  fuel 
leading  from  the  shavings  vault  to  the  boiler,  but  with  the  sill 
to  the  vault  door  raised  a  foot  or  eighteen  inches  above  the 
floor  an  ordinary  fire  would  not  be  big  enough  to  lap  over  a  sill 
of  this  sort. 

The  opening  should  be  protected  by  a  standard  tin-clad  fire 
door  arranged  to  close  automatically  by  the  fusing  of  a  link, 
and  in  addition  this  door  should  be  kept  closed  at  night-time  or 
when  the  plant  is  not  in  operation. 

For  the  protection  of  shavings  vaults  steam  jets  and  auto- 
matic sprinklers  are  advisable.  The  arrangement  of  the  steam  jets 
with  quick  opening  valves  in  the  boiler  room  and  the  arrangement 
of  the  automatic  sprinklers  has  been  described  in  last  year's 
lecture  on  Woodworkers. 

DUST  EXPLOSIONS 

Most  any  organic  substance  containing  carbon,  hydrogen, 
oxygen  or  nitrogen,  such  as  for  example  wood,  cotton,  et  cetera, 
when  ground  into  fine  dust  mixed  with  the  proper  amount  of 
air  and  supplied  with  a  spark  or  flame  will  produce  an  explosion. 
The  dust  explosions  are  said  by  chemists  to  occur  in  two  stages; 
first,  the  ignition  of  the  dust  particles  and  instantly  following  the 
explosion  of  the  gases  formed  by  the  burning  of  the  dust.  These 
phases  follow  in  such  rapid  succession  as  to  practically  form  one 
operation. 

Explosions  may  occur  at  some  distances  from  an  open  light 
or  fire.  The  presence  of  open  chutes,  stairways,  elevator  shafts, 
et  cetera,  which  allow  clouds  of  dust  to  fill  all  the  intervening 
spaces  between  the  points  of  explosion  and  the  flame  will  pro- 
duce a  flash  back  to  the  source  of  dust  production.  An  atmos- 
phere of  dust  may  be  in  contact  with  a  flame  without  an  explosion 


39 

because  the  precise  conditions  are  not  present,  but  the  moment 
the  right  conditions  arrive  the  flames  shoot  through  the  mass  with 
an  ever-increasing  energy  and  an  explosion  follows. 

With  the  exception  of  coal,  flour  and  starch,  wood  dust  is 
probably  produced  in  larger  quantites  and  by  a  greater  number  of 
processes  than  any  other  organic  dust,  and  at  the  same  time  it  is 
handled  more  carelessly  than  any  other  dust.  The  necessity  of 
its  rapid  removal  to  avoid  congestion  around  machinery  often 
makes  its  safe  disposal  a  difficult  problem,  involving  large  outlay 
for  dust  collecting  systems  which  in  themselves  are  often  respon- 
sible for  fires  and  explosions  that  occur  through  friction  of  neg- 
lected and  improperly  lubricated  fan  bearings;  from  refuse 
fouling  the  fan  blades  causing  friction,  and  from  sparks  being 
carried  backward  through  conveyor  pipes  from  boiler  furnaces 
when  the  fan  is  not  in  operation.  The  breakdown  of  dust  col- 
lecting machinery  has  been  the  indirect  cause  of  explosions  with 
loss  of  life  resulting  from  efforts  to  dispose  of  dust  and  shavings 
by  direct  hand  firing  while  the  collective  system  was  inoperative. 
Wood  dust  explosions  have  been  caused  by  dislodging  masses  of 
shavings  and  dust  from  projections  in  the  walls  of  the  vaults,  and 
the  clouds  of  dust  becoming  ignited  by  open  lights  or  furnace 
fires  nearby.  The  "Hog",  a  machine  consisting  of  a  heavy  iron 
toothed  cylinder  revolving  rapidly  within  a  strong  casing,  for 
the  purpose  of  breaking  up  wood  waste  to  facilitate  disposal  by 
the  collector  system,  is  a  large  producer  of  dust,  and  nails  or 
other  bits  of  iron  striking  sparks  have  caused  serious  explosions. 

The  dust  from  sandpapering  machines  being  naturally  very 
fine  and  dry,  and  as  it  is  produced  rapidly  in  large  quantities, 
must  necessarily  be  conducted  to  some  receptacle  by  a  blower 
system,  and  therein  lies  the  danger  of  thorough  diffusion  with  an 
abundance  of  air  extremely  favorable  to  rapid  combustion. 

The  Millers  Committee  of  Buffalo,  N.  Y.,  composed  of  the 
head  officials  of  some  of  the  large  flour  mills  in  the  Country 
became  interested  in  these  dust  explosions  and  secured  assistance 
from  the  United  States  Government  through  its  Bureau  of  Mines. 
An  investigation  was  made  of  dust  explosions  in  cereal  mills, 
elevators  and  warehouses,  and  I  quote  from  that  report  which 
is  entitled  "The  Explosibility  of  Grain  Dusts"  the  following 
hazards  which  will  give  you  an  idea  of  the  small  amount  of  dust 
necessary  to  produce  an  explosive  mixture. 

"Experience  at  the  Pittsburgh  testing  station  of  the  Bureau 
of  Mines  has  shown  that  an  explosion  could  be  produced  when 
there  was  only  .032  ounce  (thirty-two  one  thousandths  — 
32-1000)  of  coal  dust  suspended  in  each  cubic  foot  of  air,  or  one 
pound  in  500  cubic  feet  of  air.  In  order  to  produce  complete 
combustion  it  takes  all  of  the  oxygen  in  one  cubic  foot  of  air  to 
completely  burn  0.123  ounce  (one  hundred  twenty- three  thous- 
andths) of  the  dust  used.  This  dust  was  sufficiently  fine  to  pass 
through  a  200  mesh  sieve  (one  with  200  openings  in  the  length 


40 

of  an  inch)  and  floated  easily  on  a  strong  air  current.  From  these 
texts  we  might  form  a  preliminary  conclusion,  viz.,  that  when  the 
mixture  contains  between  .032  and  .123  ounces  per  cubic  foot 
it  forms  an  explosive  mixture,  and  one  that  is  extremely  danger- 
ous. We  might  term  these  proportions  the  lower  and  higher 
explosive  limits  of  the  explosive  coal  dust  mixture. 

In  the  experiments  of  M.  J.  Taffnel  at  the  Lieven  experi- 
ment station  in  France,  in  one  instance  as  low  a  weight  as  .023 
ounce  of  coal  dust  per  cubic  foot  of  space  was  sufficient  to  produce 
an  ignition.  At  the  German  station  at  Derne,  an  ignition  was 
produced  when  .040  ounce  of  coal  dust  was  suspended  in  one 
cubic  foot  of  air. 

These  figures,  as  given  apply  to  coal  dust  tests,  and  indi- 
cate that  a  very  small  amount  of  dust  in  suspension  is  sufficient 
to  produce  the  original  ignition  that  will  propagate  to  a  very 
disastrous  explosion.  Preliminary  experiments  already  con- 
ducted indicate  that  many  of  the  grain  dusts  have  relatively 
a  lower  ignition-temperature  than  many  kinds  of  coal  dust; 
also  upon  ignition  the  grain  dusts  give  higher  pressures  at  lower 
temperatures  than  some  of  the  coal  dusts.  This  would  seem  to 
indicate  the  possibility  of  securing  an  ignition  of  dust  of  this 
nature,  with  a  smaller  proportion  per  cubic  foot  than  is  neces- 
sary for  coal  dust.  This,  however,  has  not  been  definitely 
determined,  and  will  be  a  matter  for  future  experiment. 

Propagation  of  Dust  Explosions 

The  investigations  already  conducted  in  connection  with 
previous  explosions  indicate  that  usually  two  reports  are  heard 
by  the  men  who  have  survived  the  ordeal  and  have  been  able  to 
relate  their  experiences.  The  first  report  is  described  as  a  sharp, 
quick  sound,  followed  by  a  second  of  a  loud,  rumbHng  nature, 
and  lasting  for  a  much  longer  period  than  the  first  report.  The 
second  report  is  usually  followed  by  fire,  destroying  the  plant 
and  surrounding  property.  An  explosive  mixture,  consisting  of 
a  very  small  quantity  of  fine  dust  in  suspension,  ignited  by 
sufficient  temperature  would,  no  doubt,  cause  the  sharp  report 
usually  heard  first.  This  original  ignition,  possibly  only  an 
inflammation,  would  produce  sufficient  concussion  to  disturb  the 
dust  that  is  settled  and  packed  on  surrounding  ledges  and  pro- 
jections, and  shake  this  fine  dust  into  the  air,  making  an  addi- 
tional explosive  mixture.  The  heat,  or  flame  from  the  original 
small  puff,  or  inflammation,  would  cause  an  ignition  of  this  newly 
formed  mixture,  and  the  explosion  would  propagate  throughout 
a  very  large  area,  until  the  entire  dust  zone  would  be  covered. 
This  would  probably  account  for  the  loud  rumbling  sound  of 
long  duration,  accompanied  by  a  large  body  of  flame. 

This  establishes  an  important  relation  between  the  dust  in 
a  settled  or  packed  condition  and  the  amount  of  dust  in  suspen- 
sion that  is  necessary  to  originate  the  explosion.    Many  theories 


41 

and  ideas  have  been  advanced  as  to  the  conditions  under  which 
dust  explosions  are  produced  and  the  amount  of  dust  in  suspen- 
sion necessary  to  originate  the  explosion,  all  probably  based  on 
different  tests  and  experiments.  It  is  generally  agreed  that  the 
dust  must  be  fine  and  dry,  and  in  a  state  of  suspension  in  the 
atmosphere,  which  upon  being  brought  in  contact  with  suf- 
ficient heat  or  flame,  causes  an  ignition.  It  is  conceded  that 
there  must  be  a  proper  proportion  in  diffusion  so  that  the  explo- 
sive mixture  of  dust  and  air  will  ignite  with  sufficient  force  to 
propagate  to  an  explosion. 

CONVEYOR  SYSTEMS 

Nearly  all  machinery  in  plants  of  every  description  nowadays 
where  dust  is  produced  in  the  processes  of  manufacturing  is 
equipped  with  a  blower  system.  These  blower  systems  are  all 
operated  on  practically  the  same  principle.  That  part  of  each 
machine  which  is  producing  the  dust  is  surrounded  as  much  as 
possible  by  a  metal  envelope  which  tapers  off  into  a  small  metal 
tube  from  an  inch  or  two  in  diameter  up  according  to  the  amount 
of  dust  and  the  size  of  the  machine  it  is  connected  with.  Where 
there  are  two  or  more  machines  these  pipes  lead  into  a  main 
pipe  with  a  capacity  a  little  in  excess  of  the  combined  capacities 
of  the  branch  pipes,  and  this  main  pipe  then  extends  to  the  out- 
side of  the  building  or  to  its  place  of  discharge.  Somewhere 
centrally  located  is  a  large  fan  which,  when  in  operation,  produces 
a  rapid  air  current  through  the  system  which  results  in  the  metal 
envelopes  or  hoods  at  the  machines  sucking  in  material  unless 
too  heavy  for  the  air  current  into  the  system,  and  if  this  system 
is  properly  designed  without"  obstructions  this  material  is 
carried  through  and  discharged. 

Usually  this  dust  is  collected  for  convenience  and  cleanli- 
ness and  the  Cyclone  Dust  Collector  is  the  standard  now  used. 
These  dust  collectors  are  usually  in  a  woodworking  establish- 
ment on  the  top  of  the  shavings  vault,  and  when  the  system  is  in 
operation  by  means  of  a  set  of  dampers  in  the  system  of  pipes 
this  refuse  material  being  handled  can  either  be  directed  to  the 
Cyclone  Collector  or  switched  to  feed  through  other  pipes  direct 
into  the  boilers.  As  this  system  was  described  at  length  in 
last  year's  paper  no  further  description  is  necessary. 

In  many  woodworking  establishments  handling  a  large  quan- 
tity of  material  and  producing  a  large  quantity  of  refuse,  such  as 
in  box  factories,  veneer  plants,  et  cetera,  it  is  often  necessary  to 
have  a  conveyor  system  that  will  carry  these  blocks  and  ends  of 
boards  to  the  shavings  vault,  as  of  course,  no  blower  system  could 
handle  them.  Therefore,  it  is  common  to  find  in  such  factories 
a  depression  or  trough  built  in  the  floor  which  is  a  long  box-like 
affair  in  which  runs  an  endless  chain.  Every  few  feet  there  is  a 
cross  piece  either  of  iron  or  wood  fastened  at  right  angles  to  the 


42 

chain  and  being  in  length  nearly  equal  to  the  boxed  enclosure. 
With  such  a  system  arranged  holes  can  be  cut  in  the  floor  and  by 
inclined  chutes  the  refuse  from  the  various  machines  can  be  fed 
into  this  conveyor  which  sweeps  along  the  blocks  and  sticks  to 
the  power  plant. 

In  saw  mills  where  this  refuse  is  of  very  little  value  and 
where  more  is  made  than  can  be  burned  under  the  boilers  it  is 
necessary  to  burn  the  refuse  outside  of  the  plant .  There  are  two  ways 
in  which  this  is  done.  The  conveyors  in  the  mill  discharge  just 
outside  of  the  building  into  a  hopper  which  feeds  the  material 
onto  a  long  conveyor  usually  at  least  two  hundred  feet  long  which 
runs  to  a  slab  pit,  as  they  are  called,  where  a  fire  is  burning.  This 
system  continually  drops  the  new  refuse  onto  the  fire,  and  in  this 
way  the  waste  is  disposed  of.  To  guard  against  sparks  or  fire 
being  communicated  back  to  the  mill  usually  a  brick  wall  is 
built  in  the  shape  of  a  wide  V,  and  extending  from  twelve  to 
twenty  feet  high. 

The  end  of  the  conveyor  trough  next  to  the  slab  pit  is  built 
of  sheet  iron  instead  of  wood,  and  in  a  properly  arranged  con- 
veyor a  stream  of  water  plays  on  this  metal  conveyor  and  on 
to  the  chain  as  it  returns  to  the  mill.  This  water  keeps  the  con- 
veyor cool  and  it  extinguishes  any  sparks  or  burning  splinters 
that  may  have  been  caught  in  the  chain  and  ignited  while  over 
the  pit.  This  arrangement  is  more  or  less  dangerous  because  in 
case  of  a  high  wind  even  with  a  brick  wall  sparks  are  apt  to  be 
blown  to  the  mill  property. 

The  other  and  safer  way  of  disposing  of  this  refuse  is  by 
means  of  a  burner  which  is  shown  on  the  screen,  and  which  was 
described  in  last  year's  paper.  This  slab  burner  consists  of  a 
cylindrical  furnace  of  boiler  iron  with  a  dome-shaped  wire  screen 
spark  arrester  at  the  top.  They  run  from  ten  to  twelve  feet  in 
diameter  and  from,  thirty  to  sixty  feet  in  height.  In  this  design 
the  heat  generated  is  made  use  of  in  warming  water  which  in 
turn  is  fed  to  the  boilers,  and  therefore  this  burner  shown  has 
an  outer  cylinder  of  boiler  metal  extending  up  part  way  or  to 
a  point  above  where  the  greatest  heat  from  the  fire  would  be. 

All  of  these  conveyor  systems  designed  for  different  pur- 
poses have  as  their  object  the  removal  of  refuse  from  the  plant 
and  to  assist  in  maintaining  as  high  a  state  of  cleanliness  as 
possible.  Care  must  be  taken  and  personal  ingenuity  used  to 
design  the  conveyors  and  operate  them  in  such  a  way  that  they 
will  not  create  a  hazard  in  themselves  greater  than  the  refuse  of 
poor  housekeeping  hazard. 

FINISHING 

After  the  woodworking  processes  have  been  completed  and 
the  stock  put  in  its  final  shape  it  then  has  to  be  painted  or  var- 
nished, and  this  is  one  of  the  principal  hazards  of  woodworking 
establishments. 


43 

This  finishing  is  done  in  various  ways.  The  cheaper  the 
goods  made  the  less  care  is  given  to  the  painting  and  ordinarily 
toys,  furniture  and  other  cheap  articles  are  painted  by  dipping  the 
articles  into  a  tub  containing  the  paint,  varnish  or  oil.  After 
the  articles  are  dipped  of  course  they  must  be  set  away  to  drain 
and  dry,  and  this  method  of  painting  constitutes  what  is  known 
as  the  ''Dip  Tank  Hazard.'' 

The  tanks  are  usually  built  of  sheet  metal  or  of  wood  metal- 
lined  with  the  metal  in  either  case  soldered  or  riveted  together  to 
make  the  tank  tight.  Into  this  tank  is  poured  a  mixture  consist- 
ing of  oil,  turpentine,  or  whatever  is  used,  and  extending  from 
the  edge  of  the  tank  out  into  the  room  is  an  inclined  platform 
which  is  usually  metal  clad.  This  is  the  platform  on  which  the 
articles  are  set  to  drip  and  dry.  The  purpose  of  it  is  to  save  as 
much  as  is  possible  of  the  paint  or  varnish,  and  also  to  make  the 
cleaning  up  as  easy  as  possible. 

In  some  woodworking  establishments  I  have  seen  dried  paint 
on  the  floor  from  one  to  three  or  four  inches  thick  in  spots,  and 
you  can  imagine  what  a  fierce  fire  this  would  make  once  the 
building  caught  fire. 

A  dip  tank  properly  arranged  can  be  made  reasonably  safe. 
The  tank  should  be  of  heavy  construction  and  just  as  small  as 
possible  to  accommodate  the  work.  The  tank  should  be  emptied 
each  night  before  closing  time  and  the  inflammable  liquids  re- 
moved to  a  separate  house  outside  the  plant  used  especially  as 
a  paint  and  oil  house.  Near  the  top  of  the  tank  there  should 
be  provided  an  overflow  pipe  which  should  be  extended  outside 
of  the  building  and  arranged  to  discharge  into  some  place  where 
no  damage  could  be  done  to  the  surrounding  property  if  it 
discharged  burning  liquids.  A  substantial  close-fitting  metal 
cover  should  be  provided  for  each  dip  tank  when  the  tank 
is  not  in  use.  The  better  way  is  to  arrange  this  cover  on  hinges 
and  have  it  held  open  by  ropes  counterweighted  in  which  are 
fusible  links. 

When  a  dip  tank  takes  fire  it  is  almost  impossible  to  ex- 
tinguish the  fire  so  that  the  only  thing  to  do  is  to  deprive  the 
fire  of  anything  to  feed  upon  or  to  smother  it  out  with  its  own 
smoke.  A  drain  pipe  at  the  bottom  of  the  tank  enables  one  to 
drain  off  the  liquid  at  night,  while  in  case  of  a  fire  the  cover 
would  tend  to  prevent  a  fire  in  the  room  outside  of  the  tank 
igniting  the  liquid  in  the  tank,  or  if  the  tank  itself  was  on  fire 
it  would  help  smother  the  fire  and  keep  it  from  spreading  to 
the  room  itself.  Probably  these  dip  tanks  are  the  main  hazard- 
ous single  feature  in  connection  with  finishing  in  woodworking 
establishments. 

Painting  or  varnishing  done  by  hand  with  brushes  is  not 
hazardous,  and  if  care  is  taken  to  keep  the  floor  and  surroundings 
well  cleaned  after  the  work  has  been  done  so  that  an  acciunula- 


44 

tion  of  paint  will  not  pile  up  there  is  no  special  danger  from  the 
volatile  gases  given  off. 

Recently  a  new  form  of  painting  and  varnishing  known  as 
the  spraying  process  has  come  into.  use.  By  the  means  of  com- 
pressed air  the  liquid  is  sprayed  onto  the  article  to  be  painted, 
the  object  being  to  reduce  the  labor.  This  increases  the  quantity 
of  inflammable  vapors  and  is  therefore  more  hazardous  than 
painting  by  hand. 

Where  this  operation  is  carried  on  arrangements  should  be 
made  to  properly  ventilate  the  room  so  as  to  carry  oft'  these  in- 
flammable vapors  or  gases,  and  special  attention  should  be  given 
to  the  electrical  equipment  using  keyless  lights,  et  cetera,  so 
that  no  sparks  may  be  produced  which  would  set  fire  to  these 
gases. 

In  high  grade  work  the  wood  has  to  be  filled  before  it  can 
be  finished.  This  is  accomplished  by  dipping  the  object  into  a 
tank  containing  filler  liquid  or  by  applying  with  a  brush.  This 
liquid  usually  consists  of  a  ground  mineral  of  some  sort  held 
in  oil  or  some  other  liquid.  This  mixture  fills  the  pores  of  the 
wood,  and  after  drying  to  a  certain  extent  the  surplus  is  rubbed 
off  by  hand,  using  rags,  cotton  waste,  sea  weed,  moss,  et  cetera 
for  the  purpose.  Right  here  is  where  another  serious  hazard 
develops;  that  is,  in  the  care  and  disposal  of  these  oil-soaked 
waste  rags  or  moss.  As  we  have  learned,  spontaneous  combus- 
tion readily  sets  up  in  any  vegetable  fibre  material  when  satu- 
rated with  certain  kinds  of  oil,  provided  the  proper  conditions 
exist.  Therefore,  extreme  care  must  be  taken  at  all  times  to 
see  that  all  of  this  material  is  removed  at  least  once  a  day  before 
closing  and  burned  under  the  boilers.  Self-closing  metal  oily 
waste  cans  should  be  provided  as  receptacles  for  this  refuse. 

After  the  filling  has  been  rubbed  down  to  as  smooth  a 
surface  as  possible  the  varnish  is  applied  usually  with  a  brush, 
but  sometimes  in  cheap  work  by  dipping.  The  hazard  here 
lies  in  the  use  of  materials  of  an  inflammable  and  more  or  less 
volatile  nature.  They  contain  turpentine,  linseed  oil  and  other 
constituents.  For  high  grade  finish  numerous  coats  of  varnish 
are  applied  and  one  after  the  other  they  are  rubbed  down  by 
using  pumice  stone  and  water  or  some  similar  material;  this 
process  is  not  hazardous.  Quite  frequently  in  connection  with 
varnishing  it  is  necessary  to  have  a  dry  room  and  here  you 
have  combined  the  hazard  of  the  dry  room  and  the  inflammable 
gases. 

Water  will  not  under  ordinary  circumstances,  extinguish  an 
oil  or  gas  flre.  Therefore,  it  is  customary  to  use  clean  dry  sand 
or  chemicals  for  extinguishing  these  fires.  It  is  also  advisable 
to  have  pails  of  sand  with  small  scoops  handy  with  which  to 
spread  the  sand  in  case  of  fire. 

In  the  foregoing  I  have  tried  to  give  you  what  appears  to 
me  to  be  the  hazardous  features  of  woodworking  establishments 


45 

and  as  they  are  common  to  most  woodworking  plants  a  good 
knowledge  of  these  features  and  their  methods,  arrangements 
and  protection  will  enable  you  to  handle  any  special  combina- 
tion or  arrangement  which  you  would  meet  with  in  the  innumer- 
able combinations  of  woodworking  establishments. 

There  is  a  pamphlet  printed  by  the  RolHns  Publishing  Com- 
pany of  Chicago  which  was  written  by  Mr.  S.  H.  Lockett,  en- 
titled * 'Woodworkers,  Their  Processes  and  Hazards."  In  this 
pamphlet,  (which,  by  the  way,  sells  for  one  dollar  per  copy)  are 
listed  alphabetically  most  of  the  woodworking  processes,  and 
each  is  briefly  described  with  the  hazardous  features  brought  out. 

I  understand  that  other  Institutes  of  this  sort  that  are 
giving  Courses  this  year  are  putting  much  more  time  on  this  sub- 
ject, but  as  one  period  is  all  that  could  be  given  in  the  Course  here 
this  year,  it  has  been  necessary  to  skim  over  it  as  briefly  as  pos- 
sible. I,  therefore,  urge  you  who  are  interested,  and  especially 
those  of  you  who  intend  to  take  the  examinations,  to  secure  this 
pamphlet  on  Woodworking  and  read  it,  but  I  am  sure  that  aside 
from  the  Special  Hazards  introduced  because  of  their  processes 
such  as  metal  working  in  connection  with  the  woodworking,  as 
tor  example,  in  a  billiard  table  factory  you  will  find  the  Common 
Hazards  and  the  Special  Hazards  which  we  have  discussed  are 
readily  recognized. 

I  would  like  very  much  to  have  had  time  to  take  the  log 
as  it  is  prepared  by  the  loggers  in  the  woods,  bring  it  to  the  saw 
mill  and  start  it  on  its  journey  through  the  various  factories, 
but  lack  of  time  prevents  this  attractive  method  of  handling 
the  subject. 

You  will  find  in  the  library  catalogs  which  I  collected  last 
year  and  from  which  you  can  become  familiar  with  the  different 
machines  used  in  woodworking  establishments. 

I  thank  you  for  your  patient  attention. 


History  anJ  PKilosot)ky  of  Fire  Insur- 
ance Rating — First  Pa{)er 

BY 

EDWARD  R.  HARDY 
Tke  Making  of  Rates 

First  of  four  lectures  delivered  before  tke  Insurance  Institute  of  Hartfora 

FRIDAY.  JANUARY  29.  1915 

It  has  not  been  my  privilege  to  listen  to  the  addresses 
which  have  preceded  this;  no  doubt,  however,  you  are  in  close 
touch  with  what  I  call  the  larger  factors  in  the  business.  By 
this  I  mean  the  premium  receipts,  the  losses,  expenses  and  amount 
at  risk. 

It  is  well,  however,  to  set  these  before  us  in  their  larger 
aspect  before  turning  to  the  concrete  problems  which  we  are 
to  discuss. 

The  total  wealth  of  the  United  States  is  estimated  at  one 
hundred  and  twenty  (120)  billions  of  dollars.  Of  this  sum  nor- 
mally one-third  is  covered  by  a  policy  of  fire  insurance.  This 
ratio  seems  to  hold  through  a  series  of  years.  The  premium 
receipts  in  round  numbers  have  now  reached  approximately 
three  hundred  and  twenty-five  millions  of  dollars  per  year. 
Of  this  sum  by  and  large  55%  is  paid  out  in  losses.  Another 
40%  is  required  for  expenses,  and  a  meager  5%  is  about  all  the 
Underwriter  may  hope  to  retain.  To  put  the  matter  in  a  some- 
what more  concrete  form,  for  each  dollar  received  in  premiums,  $.55 
must  be  paid  back  in  losses;  $.40  in  expenses;  and  $.05  for 
reserves  and  dividends.  I  am  speaking  now  only  of  the  premium 
of  course  and  not  taking-  into  consideration  the  returns  from 
investments. 

The  average  rate  of  insurance  charged  throughout  the 
United  States  for  a  period  of  years  is  as  follows: 

In  1913  —  $1.0417  In  1908  —  $1.1444 

In  1912  —  $1.0596  In  1907  —  $1.1697 

In  1911  —  $1.0594  In  1906  —  $1.1469 

In  1910  —  $1.0822  In  1905  —  $1.1679 

In  1909  — $1.1224  In  1904  — $1.1613 

The  making  of  the  fire  insurance  rate  would  be  a  compara- 
tively simple  matter  if  it  was  merely  necessary  to  ascertain 
the  total  sum  required  to  be  raised  and  then  to  divide  that 


47 

equally  among  the  insured  property,  charging  the  same  rate 
for  each  $100  of  insurance.  If  it  were  possible  to  determine 
the  rate  of  insurance  in  this  simple  manner,  as  the  Assessor  of 
Taxes  does,  the  amount  per  thousand,  the  problem  would  be 
extremely  simple. 

Definitions:  A  few  definitions  may  possibly  be  of  some 
value  in  helping  us  to  elucidate  the  problem.  Broadly  speaking, 
rates  are  divided  into  two  classes  —  General  Minimum  Rates 
and  Specific  Rates.  The  Specific  Rate  is  a  rate  applying  to  a 
given  risk  at  a  given  location.  It  only  applies  to  this  one  risk, 
hence  its  appellation,  specific. 

The  General  Minimum  Rate  is  a  rate  applying  to  a  class  of 
business,  of  which  the  numbers  are  so  large,  the  degree  of  hazard 
so  uniform  and  light  as  to  make  it  unnecessary  to  provide  a  Specific 
Rate.  An  illustration  of  this  is  found  in  the  rates  applying  to 
houses  occupied  for  dwelling  purposes  which  are  rarely,  if  ever, 
rated  specifically,  but  a  broad  General  Minimum  is  adopted 
applying  throughout  the  given  territory  to  the  entire  class.  If 
I  may  use  the  City  of  New  York  as  an  illustration,  it  has  approxi- 
mately 350,000  buildings,  possibly  more  exact  statistics  are  not 
available.  About  one  risk  in  seven  or  one  building  in  seven  is 
subject  to  a  Specific  rate.  The  remaining  300,000  buildings  have 
applying  General  Minimum  rates,  these  rates  being  furnished 
to  the  members  and  when  appHcation  for  insurance  is  made  they 
make  their  own  inspection  and  determine  the  rate  applicable 
under  the  General  Minimum.  . 

The  phrase  "Flat  Rate"  is  also  sometimes  used  and  refers 
to  a  rate  which  is  subject  to  no  reduction  for  any  feature  what- 
ever, though  in  some  states  it  may  have  a  local  application  or 
meaning,  as  in  the  state  of  New  Jersey,  where  it  applies  to  the 
rates  which  are  in  force  when  the  policies  are  written  without 
co-insurance.  Finally  the  phrase  "Short  Rates"  is  occasionally 
used  and  this  merely  refers  to  risks,  which  being  written  for  a 
period  of  less  than  one  (1)  year,  take  a  percentage  of  the  rate 
as  determined  by  the  Short  Rate  Table  and  hence  are  called 
Short  Rates. 

In  the  year  1609  a  proposition  was  made  by  a  Count  Von 
Oldenburg  that  a  fund  be  created  for  the  reimbursement  of 
individuals  who  should  meet  with  a  loss  by  fire.  It  was  suggested 
that  for  each  $100  of  valuation  of  the  property,  there  should 
be  a  contribution  of  $1.00,  which  would  make  a  rate  of  1%. 
Nothing  came  of  this  early  scheme  and  its  only  value  to  us  is 
as  throwing  light  on  the  first  feelings  toward  establishing  the 
rate  of  insurance. 

Modern  Fire  Insurance,  as  you  have  probably  learned,  began 
after  the  great  London  fire  of  1666.  Probably  in  the  year  1667, 
Nicholas  Barbon  founded  the  first  fire  office  or  set  up,  as  the 
expression  then  was,  the  first  office  for  the  insurance  of  property 
from  fire. 


48 

As  to  the  method  by  which  Barbon  computed  his  rates,  we 
have  no  direct  information.  None  of  his  printed  matter  of  the 
early  days  has  come  down.  None  of  the  proposals,  nothing 
in  fact  to  show  from  what  data  he  determined  the  rate.  We 
can  only  infer  from  the  methods  followed  by  his  predecessors 
or  tables  published  some  years  later,  the  practice  adopted .^ 

Barbon  had  first  conducted  his  office  as  an  individual 
but  later  formed  it  into  a  partnership.  The  earliest  table, 
however,  that  we  have  is  dated  in  1681,  which  shows  the  fol- 
lowing facts.  The  insurance  was  always  for  a  term  of  years  and 
this  first  table  provided  for  policies  for  seven  (7)  years,  eleven 
(11)  years,  twenty-one  (21)  years,  and  thirty-one  (31)  years. 
In  all  probability  these  periods  conform  pretty  close  with  the 
leashold  periods  then  in  force  in  Great  Britain. 

The  first  rates  were  determined  on  the  rental  value  of  the 
property  and  their  first  table  shows  the  rate  charged  from  one 
to  ten  pounds  of  rental  value  and  from  that  point  an  increase 
of  10  pounds  up  to  100  pounds.  Thus  if  the  rental  value  of  a 
building  was  one  (1)  pound,  the  premium  was  2  shillings,  6 
dimes  for  seven  (7)  years.  The  practice,  still  followed,  of  making 
a  concession  where  the  policy  was  written  for  a  longer  term  than 
the  shortest  period,  was  early  adopted.  Thus  where  the  rental 
value  was  one  (1)  pound  and  insured  for  seven  (7)  years,  the 
charge  was  2  shillings,  six  (6)  dimes.  If  the  property  was  insured 
for  twenty-one  (21)  years  or  three  times  this  long,  the  rate  was 
not  three  times  that  for  seven  years,  but  was  twice  that  or  5 
shillings.  This  practice  is  still  in  force  and  whenever  the  rate  of 
Fire  Insurance  is  quoted,  it  is  necessary  to  bear  in  mind  the 
practice  governing  the  class  of  business  to  which  the  rate  applies 
and  the  customs  under  which  it  is  written.  In  nearly  all  parts 
of  the  world  and  especially  in  the  United  States,  buildings,  if 
written  for  more  than  one  year,  take  a  portion  of  the  yearly 
rate  for  the  term  beyond  one  year.  These  terms  vary  in  the 
United  States,  but  a  building  policy  may  be  generally  written 
for  three  years  for  23^  annual  premiums  and  proportionate 
reduction  if  written  for  five  or  seven  years.  This  applies  also 
to  certain  classes  of  property  as  household  furniture,  but  does 
not  generally  apply  to  stocks  of  merchandise  or  the  goods  in 
a  manufacturing  plant.  In  quoting  the  rate  of  insurance  it  is 
well  to  bear  this  fact  in  mind,  that  the  annual  rate  may  not  be 
indicative  of  the  amount  which  the  insured  is  paying,  since  the 
class  of  property  to  which  it  appHes  might  through  practice 
and  custom  be  written  for  a  term  of  years,  and  subject  to  a 
fairly  large  percentage  of  reduction. 

There  never  was  a  time  in  the  history  of  the  Fire  Insurance 
business  that  the  same  amount  was  charged  for  each  SI 00  of 
insurance  regardless  of  the  property  covered.  The  classifying 
of  the  risks  and  the  charging  of  the  rate  in  accordance  with  the 
losses  in  the  class  was  established  apparently  in  the  very  begin- 


49 

ning.  Thus  the  rates  quoted  above  were  taken  from  the  table 
of  1681  and  were  for  brick  or  stone  buildings.  For  a  building, 
say  of  timber,  which  word  in  Great  Britain  corresponds  to  our 
word  ''wooden,"  then  the  rate  of  the  building  was  double  the 
rates  which  I  have  quoted  to  you.  This  classification  began  with 
the  business. 

In  the  year  1690,  which  was  twenty-three  (23)  years  after 
Barbon  had  established  his  office,  there  apparently  were  within 
the  bills  of  mortality  one  hundred  and  five  thousand  houses, 
of  which  seventy-three  hundred  are  stated  to  have  been  in- 
sured. During  this  year,  or  by  this  time,  at  least,  the  method 
of  determining  the  rate  of  insurance  was  changed,  apparently 
passing  from  the  method  of  basing  the  rate  of  insurance  on  the 
rental  value  of  a  property  to  basing  the  rate  of  insurance  on  the 
valuation  of  the  property  and,  in  1700,  the  fire  office  which  was 
the  direct  successor  to  Barbon 's  individual  enterprise  published 
a  table  giving  the  rates  for  one  year,  two  years,  three  years, 
four  years,  and  seven  years;  thus  showing  a  much  shorter 
period  of  time  for  which  insurance  could  be  purchased  and  show- 
ing the  rate  of  insurance  from  ten  (10)  pounds  up  to  100  pounds, 
increasing  by  tens  and  from  that  with  increase  of  100  pounds  up 
to  1,000  pounds.  The  same  method  of  pro-rating  was  then  in 
force  if  the  insurance  was  carried  beyond  three  years.  Thus 
insurance  for  four  years  was  at  the  rate  of  33^  times  for  a  one 
year  policy,  and  for  seven  years  it  was  five  times  the  annual 
rate.  The  rates  are  still  quoted  for  brick  or  stone,  double  the 
amount  being  charged  for  timber. 

A  year  or  two  later,  the  first  mutual  office  appears  to  have 
been  established  and  based  its  tables  of  the  rate  of  insurance 
on  the  fire  office  to  which  we  have  just  referred.  It  shows  rates 
for  the  same  period  of  time,  but  introduces  the  well-known  feature 
of  making  a  less  charge  as  a  fixed  charge,  but  required  a  deposit. 
Thus  if  the  house  was  valued  at  100  pounds,  the  fire  office 
charged  6  shillings  for  one  year  policy,  the  mutual  office  charged 
one  (1)  shilling  four  (4)  pence,  but  required  a  deposit  of  five  (5) 
shillings.  Of  course,  the  hope  held  out  to  the  insured  in  the 
mutuals  was  that  the  annual  payment  would  be  sufficient  to 
maintain  the  insurance,  the  deposit  being  secured  and  thus  the 
eventual  payments  would  be  less  under  the  mutual  plan.  Up  to 
this  time  and  indeed  until  1708,  houses  only  were  insured.  It 
is  true  that  in  the  year  1696,  the  famous  Hand-in-Hand  Insur- 
ance Society,  which  was  recently  absorbed  by  another  office 
was  founded  for  the  purpose  of  insuring  both  houses  and  goods, 
but  it  did  not  as  a  matter  of  fact  undertake  the  insurance  of 
goods  until  the  year  1805.  In  1707  or  1708,  the  exact  date 
cannot  be  exactly  determined,  one  Sir  Charles  Povey,  a  man 
something  of  the  character  of  Barbon,  established  a  fire  office, 
making  a  specialty  of  insurance  of  goods.  This  office  is  now  the 
well-known   Sun   Insurance   Office,   enjoying  the  reputation  of 


50 

being  the  oldest  office  engaged  in  the  insurance  business  in  the 
world.  The  records  are  not  clear,  but  the  attempts  at  least  to 
insure  goods  may  have  been  tried  before  this,  but  it  is  due  to 
Povey  to  state  that  he  first  placed  the  business  on  the  substantial 
basis,'  making  it  as  commercially  possible  as  Barbon  did  the  in- 
surance of  houses. 

The  record  would  appear  to  show  that  no  distinction  was 
made  in  the  rate  of  insurance  between  the  insurance  of  goods 
and  the  insurance  of  buildings  in  which  the  goods  were  contained, 
the  same  tables  apparently  being  followed  giving  the  usual 
rates  for  brick  or  stone  buildings,  the  table  for  timber  and  the 
goods  therein. 

In  1720-1,  the  proposals  of  the  Royal  Exchange  Assurance, 
the  oldest  insurance  corporation  still  in  existence,  stated  that 
it  would  insure  any  college,  hall,  house  or  any  other  building, 
and  all  goods,  wares  and  merchandise  except  notes,  bills,  tallies, 
books  of  accounts,  ready  money,  china  and  glasswares,  jewels, 
plates,  pictures,  writings,  corn,  hay  and  straw  not  in  trade,  to 
their  full  value,  the  assured  paying  but  five  (5)  shillings  per 
annum  for  every  250  pounds  on  brick  or  stone  buildings  or  goods 
and  merchandise  therein  and  eight  (8)  shillings  on  timber,  plaster 
or  thatched  buildings,  or  goods  or  merchandise  therein.  If  the 
sum  insured  exceeds  not  1,500  pounds  of  if  the  sum  insured 
exceeded  that  sum  the  rates  were  7  shillings  and  6  dimes  for 
each  150  pounds  of  value  in  the  brick  or  stone  buildings  and  12 
shillings  in  the  other  buildings.  The  classification  apparently 
at  this  time  as  shown  by  their  proposals  began  to  be  extended 
and  probably  the  earliest  reference  to  the  segregation  of  certain 
trades  appears  at  this  period,  since  they  refer  to  brewers,  dis- 
tillers, chemists,  apothecaries,  powder  men,  ship  and  tallow 
chandlers,  sugar  and  bread  bakers,  dyers,  soap  boilers,  oil  men 
and  color  men  as  being  more  hazardous  than  others.  Such  per- 
sons must  be  under  the  five  shilling  rate  or  the  7  shilling,  6  dime 
rate  for  each  250  pounds  of  insurance  in  a  brick  or  stone  building 
and  12  shillings  if  in  the  second  class  of  buildings.  Likewise 
looking  and  other  glass  and  china  wares  in  trade  being  more 
hazardous,  must  pay  the  same  rates.  You  will  also  note  from 
this  quotation  which  has  been  made  in  a  liberal  manner  that 
the  rate  of  insurance  increased  if  the  insurance  passed  beyond 
a  certain  sum.  This  principle  of  charging  more  beyond  a  certain 
amount  of  insurance  continued  in  force  in  Great  Britain  until 
about  1805,  when  it  passed  away.  It  never  apparently  was  in 
practice,  or  only  to  a  limited  extent  in  the  United  States  and  is 
probably  not  observed  anywhere  now  in  the  world.  At  this 
point,  however,  it  is  also  well  to  note  that  insurance  up  to  the 
full  value  of  the  prope'rty  was  permissible,  up  to  this  time  appar- 
ently no  more  than  three-fourths  of  the  valuation  could  be  in- 
sured. The  Union  Fire  Office,  which  only  recently  passed  out 
of  existence,  founded  in  1714-15,  had  a  system  of  classification 


51 

which  prevailed  more  or  less  for  150  years,  they  dividing  risks 
into  common  insurances,  half  hazardous  insurances,  hazardous, 
and  half  hazardous,  and  doubly  hazardous.  They  are  said  to 
have  been  the  first  company  to  introduce  the  classifications 
under  the  hazardous  and  doubly  hazardous.  Those  under  half 
hazardous  or  other  fractional  parts  referred  to  the  relation  of  a 
risk  not  hazardous  to  one  which  was  hazardous  and  when  a 
risk  was  offered  for  insurance,  taking  the  surveyor's  report 
the  Directors  determined  in  which  class  it  should  fall.  The  Royal 
Exchange  Assurance  Co.  was  the  first  company  that  stated 
that  when  a  loss  occured  the  assured  would  be  paid  in  full. 
Previous  to  this  time  it  had  been  customary  to  deduct  3%  or 
5%  from  the  loss  as  payment  for  the  expenses  of  settling  the 
loss.  The  classification  which  was  finally  adopted  and  existed 
in  Great  Britain  for  a  great  many  years  was  that  of  common 
insurances,  hazardous  and  double  hazardous  insurances.  This 
classification  remained  in  vogue  and  is  undoubtedly  used  today 
to  a  certain  extent,  with  the  exception  that  in  Great  Britain 
there  is  now  in  force  some  seventeen  (17)  specific  tariffs  applying 
to  various  manufacturies  and  warehouses.  The  first  of  these 
was  adopted  on  June  1,   1843,  and  applied  to  woolen  mills. 

From  time  to  time  thereafter,  up  to  the  year  1906,  these 
tariffs  have  been  put  in  force  for  a  single  business.  They  generally 
apply  to  the  whole  of  Great  Britain,  but  occasionally  are  limited 
to  Scotland  or  England  and  Wales.  The  most  recent  was  the 
tariff  applying  to  bleach,  dye  and  print  works,  which  was  adopted 
June  7,  1906. 

Previous  to  the  year  1843  there  apparently  was  not  in 
Great  Britain  but  very  little  co-operative  action  on  the  part 
of  the  lire  insurance  business  concerning  the  rate  making  function. 
Since  that  year,  however,  when  the  first  tariff  on  woolen  mills 
was  published,  the  business  has  been  quite  closely  regulated  by 
the  Fire  Offices  Committee,  although  no  tariffs  are  issued  except 
for  the  larger  manufacturing  businesses.  There  are,  of  course, 
and  always  have  been  in  Great  Britain,  certain  companies  which 
have  never  been  members  of  the  Fire  Offices  Committee  and 
are  known  as  non-tariff  offices,  but  these  apparently  have  not 
contributed  any  new  plans  to  the  business,  but  have  depended 
rather  on  shaving  the  rates  and  the  tariffs  to  some  extent  in 
order  to  secure  their  business.  There  are,  however,  very  few 
companies  in  Great  Britain  comparatively  speaking  and  the 
business  may  be  said  to  be  practically  under  the  control,  since 
the  year  1843,  of  the  Fire  Offices  Committee. 

Coming  now  to  the  United  States,  there  were  attempts 
previous  to  the  year  1752  to  establish  the  business  of  Fire  In- 
surance. The  recent  records  have  disclosed  a  company  that 
was  formed  at  Charleston,  S.  C,  but  beyond  the  fact  of  its  having 
been  organized  and  ready  for  business,  no  other  data  has  been 
brought  to  light  concerning  its  operations.    There  are  evidences 


52 

that  individual  underwriters  undertook  the  business  of  Fire  In- 
surance. Indeed,  Joseph  Marion,  an  early  insurance  man  of 
Boston,  Mass.,  claims  to  have  set  up  the  first  fire  insurance 
office  in  the  year  1724. 

Since  dictating  the  above,  I  have  turned  up  exact  data  and 
facts  concerning  the  first  company  and  find  that  it  was  organized 
in  Charleston,  S.  C,  December  13th,  1735,  i.  e.,  the  initial 
meeting  was  held  on  that  date.  On  January  3rd,  1736  it  was 
advertised  that  the  rules  were  engrossed  and  ready  for  signature 
and  the  statement  made  out  that  the  value  of  property  proposed 
to  be  insured  by  those  who  had  already  subscribed  amounted 
to  100  thousand  pounds,  the  society  to  be  organized  on  the  3rd 
of  February,  1736,  under  the  name  of  the  "Friendly  Society." 
I  have  given  this  reference  in  full  because  I  think  the  facts  are 
not  generally  known  and  you  may  find  them  of  value.  However 
interesting  this  may  be  concerning  this  company,  the  starting 
point  for  continuous  fire  insurance  history  dates  from  the  year 
1752  when  the  Philadelphia  Contributionship  for  the  insurance 
of  houses  against  losses  by  fire  was  organized.  The  organization 
was  completed  on  April  13th,  1752,  on  which  date  the  directors 
were  elected  and  officers  appointed.  This  first  company  only 
insured  houses  or  buildings  and  the  insurance  of  goods  was  a 
much  later  development  following  in  this  respect  the  experience 
in  England.  All  the  evidence  goes  to  show  that  the  Philadelphia 
Contributionship  practically  drew  its  plan  from  the  "Hand-in- 
Hand"  in  London.  The  rates  in  this  first  company  were  a 
modification  of  the  London  company.  The  London  company 
required  a  fixed  annual  premium  with  a  further  sum  known  as 
the  deposit.  Experience  showed  that  the  deposit,  the  interest 
thereon  at  least  was  sufficient  to  maintain  the  company  and 
pay  its  losses,  hence  the  Philadelphia  Contributionship  merely 
required  one  deposit  expecting  to  earn  from  the  interest  receipts 
a  sufficient  sum  of  money  to  pay  the  losses.  The  minimum 
period  was  seven  (7)  years  and  deposits  for  a  brick  building 
were  20  shillings  for  100  pounds,  and  60  shillings  for  a  wooden 
building.  There  was  one  payment  in  addition  to  this  of  what 
was  known  as  the  common  fund  at  the  time  the  policy  was 
taken  out  and  this  was  1  shilling,  2  dimes  for  brick  and  2  shillings, 
6  dimes  for  frame. 

The  buildings  appear  to  have  been  divided  into  six  (6) 
classes,  a  classification  which  practically  followed  the  London 
company. 

The  third  insurance  company  in  the  United  States  was,  like 
the  second  founded  in  Philadelphia  and  became  popularly  known 
as  the  Green  Tree  Company,  its  origin  being  due  to  the  fact  that 
the  Contributionship  prohibited  the  insurance  of  houses  with 
shade  trees  in  front  of  them.  This  prohibition  was  due  to  the 
fact  that  a  fire  having  occurred  at  the  residence  of  one  of  their 
insurers,  the  firemen  were  hindered  in  their  work  of  putting  out 


53 

the  fire  by  the  shade  trees.  Certain  members  threatened  to 
secede  unless  the  rule  was  modified,  which  required  the  removal 
of  the  shade  trees  within  three  (3)  months  or  insurance  would 
cease  and  an  attempt  was  made  to  compromise  the  matter.  The 
company,  however,  remained  firm  and  in  1784  the  Green  Tree 
Company  was  organized  and  required  an  extra  premium  where 
shade  trees  were  in  front  of  the  house,  this  being  one  of  the 
early  instances  of  a  definite  recommendation  for  a  higher  charge 
for  the  increase  of  hazard. 

In  1787,  the  Mutual  Insurance  Company  was  organized 
in  New  York  and  in  1794  the  Insurance  Company  of  North 
America,  still  in  existence,  was  the  first  company  regularly 
incorporated  with  a  fixed  capital  for  doing  business  on  the  Ameri- 
can Continent.  In  none  of  these  companies  have  we  succeeded 
in  discovering  in  any  way  of  our  researches,  the  exact  statistics 
on  which  they  based  their  rates.  It  is  evident,  of  course,  that 
while  drawing  heavily  upon  London,  the  experience  of  this 
country  must  have  been  entirely  different  from  that  part.  There 
has  come  down,  however,  a  pamphlet  dealing  with  the  organiza- 
tion of  the  Mutual  Fire  Insurance  Company  of  Boston,  which 
contains  an  exceedingly  full  statement  of  the  resources  from 
which  they  drew  their  data  in  determining  their  rate  of  insurance. 
The  printed  articles  bear  the  date  of  the  pamphlet  in  which 
they  were  published  of  February  21st,  1797.  The  salient  para- 
graphs are  as  follows : 


REPORT  OF  A  COMMITTEE 

CHOSEN  TO  DIGEST  A  PLAN,  AND  FORM 

RULES  AND  REGULATIONS  FOR  A 

MUTUAL  FIRE  INSURANCE  COMPANY. 

Funds  of  the 
Mutual  Fire  Insurance  Company. 

Mansion  houses  supposed  to  be  in  Boston,    ....         2,500 
Stores  and  other  buildings, 2,000 


4,500 


Admitting  that  1,500  buildings  should  be  insured  in  this  Company 
valued  at  Dol.  2,000  each  4-5th  only  insurable;    we  then  say 

1,500  buildings  valued  in  policies  at  Dol.  1,600  each  will  amount 
to Dol.  2,400,000 

Dol.  2,400,000  being  then  at  hazard,  adequate  funds  are  to  be 
sought. 


54 

To  effect  this  divide  the  buildings  into  six  classes,   with   the 
rates  of  hazard  affixed  to  each  as  follows : 

Class  1  upon  each  Dol.  100  —  35  cents. 

Class  2  upon  each  Dol.  100  —  373^  cents. 

Class  3  upon  each  Dol.  100  —  40  cents. 

Class  4  upon  each  Dol.  100  —  423/2  cents. 

Class  5  upon  each  Dol.  100  —  45  cents. 

Class  6  upon  each  Dol.  100  —  50  cents. 


Funds. 

Funds  raised  by  premiums  and  deposits,  policies,  transfers, 
endorsements,  forfeits  and  interest  accruing  thereon,  are 
denominated  the  Absolute  Funds. 

Funds  arising  from  assessments,  which  the  Directors  are  author- 
ized to  make  in  case  losses  should  happen  to  consume  the 
Absolute  Funds,  are  raised  by  premiums  and  deposits 
only  —  Policies,  transfers,  etc.,  are  not  taken  into  considera- 
tion. 

They  may  pay  expenses  of  office. 
Take  a  building  of 

1  Class,  Dol.  1,600,  35  cents  upon  Dol.  100 

Deposit  four  times  amount,    .      .      .  22.40  28.00 

2  Class,  Dol.  1,600,  373^  cents  upon  Dol.  100 

Deposit  four  times  amount,    .      .      .  24.00  30.00 


3  Class,  Dol.  1,600,  40  cents  upon  Dol.  100 

Deposit  four  times  amount,    .      .      .  25,60  32.00 


5.60 
22.40 

6.00 
24.00 

6.40 
25,60 

Dol. 
90.00 

90.00 


Amount  of  3  classes, 

4  Class,  Dol.  1,600,  423/^  cents  upon 

Dol.  100, 6.80 

Deposit  four  times  amount,  27,20            34.00 

5  Class,  Dol.  1,600,  45  cents  upon 

Dol.  100, 7.20 

Deposit  four  times  amount,  28.80            36.00 

6  Class,  Dol.  1,600,  50  cents  upon 

Dol.  100, 8.00 

Deposit  four  times  amount,  32.00            40.00 


Dol.      200.00 
1494  Buildings  will  produce,     ....     49  800.00 


50,000 


55 


Second  Conditional  Funds. 

1  Class,  Dol.  1,600  at  3.58  cents,  7}^  upon 

Dol.  100  produce, 57.40 

2  Class,  Dol.  1,600,  3.81  cents,  2>^  upon 

Dol.  100  produce, 61,00 

3  Class  Dol.  1,600,  4.03  cents,  73/^  upon 

Dol.  100  produce, 64.60 

4  Class  Dol.  1,600,  4.26  cents,  23^  upon 

Dol.  100  produce, 68.20 

5  Class,  Dol.  1,600,  4.48  cents,  73^  upon 

Dol.  100  produce, 71.80 

6  Class,  Dol.  1,600,  4.93  cents,  7^  upon 

Dol.  100  produce,    ......  79.00 


Added  will  produce, 402.00 

6  Buildings  produce, 402.00 

1494  Buildings  produce,     ....   100,098.00 


100,500 

Dol.  150,500 

The  funds  here  produced  will  support  the  loss  of  94:y6  Houses 
in  7  years,  annually  13x^. 

Suppose  our  absolute  Funds  in  7  years  should  accumulate 
50  per  cent,  making  $25,000. 

We  could  then  support  the  loss  of  lOOji  Houses. 

Taking  the  intermediate  time  we  could  then  support 
101  14/16;    nearly  15  annually. 

We  insure  nearly,  at  first  setting  out,  16  times  our  capital, 
and  here  our  boundaries  are  fixed.  For  should  our  amount  at 
hazard  increase,  in  the  same  ratio  will  our  funds  increase. 

To  know  whether  these  funds  are  sufficient,  let  us  take  the 
best  data  possible. 

In  England  the  loss  of  buildings,  by  accidental  fire  only, 
is  estimated  to  be  annually  1  house  in  a  thousand.  Their  buildings 
are  of  stone,  or  brick,  and  their  fuel  sea-coal. 

In  Virginia,  in  1794,  in  their  Incorporation,  they  have  estab- 
lished eight  rates.  Their  fourth  is  estimated  at  D.  250.  upon 
100  D.  and  members  subjected  to  pay  all  losses  by  an  assessment, 
in  case  the  funds  should  be  insufficient;  the  property  insured 
is  pledged.     Their  funds  are  increasing. 

In  New  York  and  Norwich,  in  their  Incorporation,  they 
have  seven  rates.  Their  fourth  is  30  cents  upon  100  D.;  and 
they  deposit  four  times  the  amount,  subjected  to  pay  in  case  of 
loss,  beyond  the  funds,  50  cents  upon  100  D.  for  each  fire.  Their 
funds  are  increasing. 

In  answer  to  this,  it  may  be  said  that  the  places  above  men- 
tioned are  not  so  much  exposed,  therefore  we  cannot  take  an 
accurate  statement  of  a  probable  loss,  in  this  town.     This  being 


56 

granted,  we  have  recourse  to  the  records  of  the  Historical  Society 
and  recollection,  which  show  from  the  following  statement  that 
our  calculations  are  sufficiently  accurate  to  answer  our  purpose. 

In  Boston  for  the  term  of  38  years,  there  have  been  361 
Houses  and  335  Stores  consumed  by  fire.  And,  the  whole 
number  of  buildings,  at  that  time,  standing,  upon  an  average, 
in  this  town,  have  been  about  3,000. 

Then  we  say,  the  loss  sustained  in  38  years,  upon  3,000 
buildings,  has  been  18  12/38  per  annum,  and  upon  1,500,  9  6/38. 

Upon  principles  here  laid  down,  it  appears  that  the  funds 
are  adequate,  each  member  knowing  at  all  times  the  amount 
at  hazard,  the  state  of  the  funds;  and  having  a  share  in  creating 
offices  to  superintend  those  funds,  the  plan  is  safe. 

Other  Insurance  Companies  wear  a  different  aspect.  They 
insure  to  an  amount  unknown  to  the  insured  —  and  they  (the 
insured)  at  fixed  periods,  divide  the  profits. 

This  gives  us  not  the  power  of  arresting  Eagles  X  in  their 
flight.  It  simply  gives  the  chance  of  domesticating  those  we 
have. 


This  is  the  earliest  example  that  I  have  discovered  of  any- 
thing approaching  research  work  in  order  to  determine  the  rate 
of  insurance  on  property. 

From  this  time  on  the  business  of  fire  insurance  or  the 
organization  of  companies  for  the  conduct  thereof  increased 
very  rapidly.  At  what  point  in  time  there  began  to  be  concerted 
efforts  in  the  making  of  rates  is  not  absolutely  known.  The 
earliest  records  that  we  have  show  that  in  1819  there  was  or- 
ganized in  New  York  City  the  Salamander  Society. 

Early  Organizations  in  This  Country. 

1819-26.     Salamander  Society. 

No  regular  officers;  President  and  Secretary  elected  for 
each  meeting.  The  Presidents  and  Secretaries  of  the  different 
companies  met  on  the  first  Friday  of  May,  August,  November 
and  February  (quarterly)  until  Sept.  28th,  1823,  when  standing 
officers  were  elected. 

Embraced  at  first  eight  companies :  — 

Globe  Fulton 

Eagle  Washington 

Mutual  Merchants 

Franklin  "       '    Mechanics 

When  it  quit  in  January,  1826,  it  embraced  twenty-six 
companies,  the  following  being  in  addition  to  those  already 
named,  viz. : 


57 

^tna  Manhattan 

Contributionship  North  River 

Chatham  Orange 

Equitable  Phoenix 

Firemen's  Protection 

Farmers  Sun 

Greenwich  Traders 

Howard  Trademen's 

Jefferson  United  States 
Lafayette 

Classes  of  hazards  were  adopted  by  this  Society  and  it 
is  interesting  to  note  that  the  same  nomenclature  was  maintained 
until  a  few  years  ago  and  as  a  fact  exists  today  in  the  classes  of 
hazards  of  the  New  York  Board,  viz. : 
"Not  Hazardous"  like  coffee,  flour,  household  furniture,  linen, 

paints  ground  in  oil.     Rate  was  .05  added  to  the  rate  of 

the  building. 
"Hazardous",  like  china  ware,  plate  glass,  cotton  in  bales,  fire- 
crackers.    Rate  was  .10  added  to  the  rate  of  the  building. 
"Extra   Hazardous"    like   apothecaries,    fur    dressers,    printers, 

rag  stores.    Rate  .25  added  to  the  rate  of  the  building. 
"Specially  Hazardous"  like  bakers,  gas  makers  or  sellers.     Rate 

extra  as  per  table  of  Minimum  Rates. 

First  agreement  signed  by  insurance  companies  composing 
this  Society  February  2nd,  1821. 

Uniform  policy  adopted  June  19th,  1821. 

Note  the  articles  excepted  under  this  policy  as  compared 
with  Standard  Policy  of  today  (See  pages  359  and  360,  Vol.  3 
of  "The  Insurance  Times"   1870). 

A  form  of  rent  policy  was  adopted  by  the  Society  in  1821. 
When  the  Salamander  Society  quit  in  1826  it  was  succeeded  by 
a  new  organization  the  name  of  which  I  do  not  know  (See  Hayden) 
and  this  or  a  successor  must  have  remained  in  existence  for  some 
time  because  we  have  in  our  office  a  "Tariff  for  New  York  City" 
dated  1839.  The  New  York  Board  was  chartered  1863  with  a 
provision  in  its  By-Laws  that  it  may  maintain  a  rating  bureau 
or  tariff  association. 
1872. 

New  York  Tariff  Association  was  organized  by  twenty- 
seven  companies  and  managed  by  committees  of  members. 


The  earliest  attempt  to  deal  with  the  rating  problem  in  a 
general  way  was  at  a  meeting  held  in  New  York  City  by 
the  Companies  so  doing  an  agency  business.  The  meeting  was 
held  May  12,  1896.  The  report  of  the  meeting  throws  quite 
a  good  deal  of  light  on  conditions  70  years  ago.  The  report 
follows : 


58 
A  MEETING  SIXTY  YEARS  AGO. 

Of   Fire   Insurance   Companies  to   Regulate 
Rates  and  Commissions. 

The  Journal  of  Commerce  and  Commercial  Bulletiv,  October 
18,  1908,  has  been  favored  with  an  interesting  rehc.  It  is  the 
minutes  of  a  meeting  of  the  fire  insurance  companies  held  sixty 
years  ago  to  regulate  rates  and  commissions,  and  is  presented 
in  full  as  follows: 

A  meeting  of  the  representatives  of  fire  insurance  com- 
panies of  New  York,  Boston,  Providence,  Hartford,  Albany, 
Oswego,  Philadelphia,  and  New  Jersey  was  held  in  the  City  of 
New  York,  May  12th,  1846. 

The  meeting  was  called  for  the  purpose  of  taking  into 
consideration  the  present  state  of  business  of  fire  insurance  and 
to  adopt  such  measures  for  its  future  managements  as  will  do 
justice  to  the  stock-holders  and  to  that  portion  of  the  community 
who  avail  themselves  of  this  mode  of  obtaining  security  of  loss 
by  fire. 

The  following  resolutions  were  unanimously  adopted: 

Resolved,  that  the  stock-holders  of  fire  insurance  companies 
are  entitled  to  receive  from  those  whom  they  insure  such  rates 
of  premium  as  will  meet  the  losses  and  yield  a  reasonable  com- 
pensation for  the  hazard  to  which  the  capital  is  exposed  and 
that  it  is  believed  the  insured  are  willing  to  uphold  the  companies 
regarding  such  rates  of  premium  as  the  best  means  of  promoting 
their  own  security. 

Resolved,  That  the  great  amount  of  losses  sustained  by 
the  fire  insurance  companies  of  the  United  States  during  the 
last  twelve  years  have  rendered  an  advance  of  premium  in  all 
places  where  they  have  not  been  sufficiently  advanced  essentially 
necessary  to  a  continuance  of  business  and  that  it  is  the  duty  of 
those  to  whom  the  business  of  the  companies  is  entrusted  to 
adopt  suitable  measures  to  obtain  such  advance  of  premiums. 

Resolved,  That  a  committee  of  five  be  appointed  to  take 
into  consideration  the  present  condition  of  the  business  of  fire 
insurance  to  ascertain  from  past  experience  the  rates  of  premium 
required  to  meet  the  losses  and  yield  a  reasonable  compensation 
to  the  stock-holders  for  the  hazard  of  capital. 

Resolved,  That  a  committee  of  five  be  appointed  to  devise 
and  recommend  suitable  measures  for  the  better  regulation  of 
the  business  of  fire  insurance. 

At  an  adjourned  meeting  held  May  13,  the  two  committees 
made  a  joint  report  upon  the  subjects  referred  to  them  with  the 
following  statement : 


59 

It  has  been  ascertained  from  the  statistics  of  fire  insurance 
in  the  United  States  for  the  last  twelve  years  that  the  business 
has  not  produced  a  profit  equal  to  3%  per  annum  upon  the  capital 
pledged  for  the  payment  of  losses ;  that  losses  by  fire  are  yearly 
becoming  more  frequent  and  more  extensive  on  all  classes  of 
hazards ;  that  many  of  the  companies  have  been  entirely  ruined ; 
that  the  rates  of  premium  in  some  places  remain  as  formerly 
and  in  other  places  have  been  much  reduced ;  that  the  increase 
of  losses  has  not  been  confined  to  a  few  places,  but  has  been 
widely  extended. 

It  is  believed  that  the  whole  amount  of  losses  that  have 
happened  in  villages  and  upon  manufactories  and  other  isolated 
risks  within  the  last  few  years  has  been  as  great  in  proportion 
to  the  sum  insured  as  in  cities. 

Although  large  dividends  embracing  the  interest  on  capitals 
have  in  some  years  been  declared  by  a  few  of  the  companies 
if  the  small  amount  of  capital  upon  which  they  are  made  be 
compared  with  the  whole  amount  embarked  in  the  business 
and  with  the  proportion  of  the  aggregate  capital  upon  the  small 
dividends  or  none  have  been  declared  and  the  amount  of  capital 
entirely  lost,  it  will  be  found  to  sustain  the  foregoing  statement. 

These  results  call  for  an  advance  of  the  rate  of  premium, 
that  capitalists  may  not  be  deterred  by  the  continual  disasters 
from  establishing  and  sustaining  fire  insurance  companies  and 
that  the  owners  of  the  property  may  be  guaranteed  an  indemnity 
against  loss  by  an  adequate  accumulation  of  premiums  as  well 
as  by  the  capital  of  the  insurance  companies. 

The  following  rules  and  regulations  with  the  classifications 
of  hazards  and  rates  of  premium  annexed,  were  approved  and 
recommended  to  the  companies  represented  for  adoption  as 
the  best  possible  means  of  meeting  the  present  emergency  and 
providing  for  future  losses : 

Rules  and  Regulations. 

1.  The  rate  of  premium  charged  by  the  local  companies 
in  any  place  where  agencies  are  established  are  to  be  the  lowest 
rates  charged  by  the  agents. 

2.  The  agents  are  to  be  instructed  to  confer  with  the 
companies  and  other  agents  in  the  same  place  and  the  charge 
in  all  other  cases  not  less  than  the  rates  of  premium  charged  by 
them,  to  agree  with  such  companies  and  agents  upon  the  rates 
for  special  hazards  and  hazards  not  herein  enumerated,  and  in 
places  where  rates  of  premium  have  not  been  established  to 
meet  with  representatives  of  the  local  companies,  or  by  them- 
selves in  places  where  there  are  none,  on  or  before  the  fifteenth 
of  each  month  to  agree  upon  the  rates  to  be  charged  for  their 
respective  risks,  which  are  to  terminate  during  the  succeeding 


60 

month,  to  furnish  each  other  with  duplicate  lists  of  their  several 
risks,  with  the  rates  of  premiums  heretofore  charged  and  the 
new  rates  agreed  upon. 

3.  In  the  case  of  any  deviation  from  the  established  rules 
and  regulations  or  rates  of  premium  the  company  or  agent  in- 
jured by  such  deviation  shall  ascertain  from  the  company  or 
agent  that  has  deviated  whether  it  happened  by  mistake  or 
whether  it  was  intentional ;  if  the  latter,  the  agent  shall  commu- 
nicate the  fact  to  the  company  he  represents  and  to  the  companies 
and  other  agents  in  the  place. 

In  the  cities  where  rates  of  premium  have  been  established 
such  other  mode  may  be  adopted  for  the  purpose  of  securing 
uniformity  of  rates  as  shall  be  deemed  best  by  the  local  companies 
and  agents  at  such  places. 

4.  A  less  premium  than  the  rate  established,  or  a  division 
of  the  commissions  with  the  insured  or  any  other  pecuniary 
inducements  shall  be  in  no  case  offered  or  allowed  for  the  purpose 
of  obtaining  a  risk. 

5.  The  compensation  to  agents  shall  not  exceed  10%  on 
their  premiums  received. 

Classes  of  Hazards  and  Rates  of  Premiums  in 
THE  Eastern,  Northern  and  Middle  States. 

1.  A  building  occupied  entirely  as  a  dwelling  constructed 
of  stone  or  birck  with  chimneys  standing  upon  the  same  founda- 
tion, roof  slate  or  metal,  gutters  metal,  stove  and  pipes,  if  any, 
safely  placed  and  well  secured,  100  feet  or  more  distance  from 
other  buildings,  premium  .30. 

If  the  roof  be  wood  with  metal  gutters,  premium  .40. 
If  the  roof  be  wood  without  metal  gutters,  .10  to  be  added 
to  the  above. 

2.  Buildings  of  wood  with  a  stone  or  brick  basement, 
occupied  entirely  as  a  dwelHng,  chimneys,  stoves  and  pipes  as  in 
first  class,  with  a  good  lightning  rod,  .50. 

If  without  a  lightning  rod,  .60. 

A  wood  house,  wash  house,  privy  or  carriage  house  within 
100  feet,  if  not  connected,  or  endangered  by  a  barn  or  other 
buildings  in  which  fire  or  lights  are  kept,  are  not  to  increase 
these  rates. 

Upon  the  above  described  buildings  when  endangered  by 
other  buildings  or  premises,  an  additional  premium  to  be  charged 
equal  to  such  additional  hazard. 

If  a  chimney  or  hearth  stands  upon  beams,  .25  to  be  added 
to  the  above  premiums. 

If  occupied  as  a  dwelHng  and  store  or  as  a  store  only,  in 
which  is  contained  a  hazardous  and  extra  hazardous  merchandise 
and  such  articles  as  are  usually  kept  in  country  stores,  .25  in 
addition  is  to  be  charged  for  the  building,  the  same  additional 
or  more  to  the  rate  of  the  building  upon  the  merchandise. 


,30. 


.60. 


61 

Examples. 

The  building  first  mentioned  occupied  entirely  as  a  dwelling, 

If  occupied  as  a  dwelling  and  store,  .55. 

If  occupied  as  a  store  only,  .55. 

The  building  last  mentioned,  occupied  entirely  as  a  dwelling, 


If  occupied  as  a  store  and  dwelling,  .85. 

If  occupied  as  a  store  only,  .85. 

The  merchandise  therein  to  be  charged  the  same  or  a  higher 
premium. 

Taverns  and  hotels  in  the  country  distant  100  feet  or  more 
from  the  barn  and  stable  and  no  other  exposure,  $1.00  to  $1.50; 
a  proper  addition  to  these  premises  for  any  other  exposure. 

Taverns,  barns  and  contents,  $1.50  to  $2.00. 

In  cities  and  villages  the  above  mentioned  buildings  with 
no  greater  exposure  to  other  risks,  may  be  insured  at  the  same 
premium. 

3.  Buildings  in  cities  and  villages  where  rates  are  not 
established  by  the  local  companies : 

A  frame  building  occupied  entirely  as  a  dwelling,  adjoining 
or  within  100  feet  of  another  like  building,  .85. 

If  adjoining  or  within  10  feet  of  two  like  buildings,  $1.00. 

If  in  a  row  of  three  and  not  more  than  six  like  buildings,  $1.25. 

If  occupied  as  stores,  or  some  of  them  so  occupied,  .25  to 
be  added  to  the  above  rates. 

If  one  of  them  is  occupied,  or  endangered  by  another  building 
occupied  for  specially  hazardous  purposes,  an  additional  pre- 
mium shall  be  charged  that  will  cover  such  hazards. 

Brick  buildings,  situate  as  above  mentioned,  with  a  shingle 
roof,  end  walls  (without  windows)  extending  above  the  roof, 
a  deduction  of  .10  to  be  made  from  the  above  premium. 

Brick  buildings  situate  as  above,  with  slate  or  metal  roof, 
end  walls  (without  windows)  carried  above  the  roof,  .20  less 
than  the  above  premium. 

The  privilege  of  keeping  more  than  25  pounds  of  gun- 
powder at  a  time  and  that  in  tin  or  other  metal  canisters,  shall 
not  be  granted  without  additional  premium  not  less  than  .25. 

Wherever  stores  are  lighted  by  camphens  or  any  preparation 
of  turpentine  or  alcohol  an  additional  premium  of  .10  shall  be 
charged  for  that  hazard,  both  on  building  and  goods. 

Western  States. 

The  rates  of  premium  in  these  states  are  to  be  regulated 
by  the  second  and  third  rule,  unless  otherwise  provided  for 
hereafter. 


62 

Southern  States. 

The  rates  of  premium  in  these  states  are  to  be  regulated  by 
the  second  and  third  rule,  unless  otherwise  provided  for  hereafter. 

Manufactories,  flour  mills  and  other  special  hazards:  The 
rates  of  premium  on  these  risks  are  to  be  regulated  by  the  second 
and  third  rules. 

Sixty  (60)  years  ago  the  rate  making  in  the  United  States 
was  practically  at  the  point  where  it  had  been  for  a  large  number 
of  years.  It  was  based  on  the  classes  of  hazardous,  non-hazardous 
extra  hazardous  and  specially  hazardous,  this  classification  con- 
tinuing in  force  up  to  a  period  within  about  ten  (10)  years.  It 
is  still  found  in  a  large  number  of  the  form's  and  is  not  infre- 
quently used  in  the  drawing  of  leases,  where  the  tenant  is  expected 
to  pay  for  any  increase  of  insurance.  In  the  agency  field  the 
rates  were  thus  furnished  by  the  companies  as  a  part  of  their 
manual  of  instruction,  a  copy  of  which  I  have,  being  published 
in  the  year  1859  by  the  Hartford  Fire  Insurance  Company. 
It  contained  complete  instructions  to  the  agents  as  to  policy 
forms,  method  of  surveying,  determination  of  the  rating  and  all 
other  matters  which  the  company  deemed  necessary  to  the  success- 
ful conduct  of  business.  It  especially  cautioned  the  agent  that 
he  should  co-operate  with  the  other  companies,  especially  the 
local  companies  doing  business  in  his  territory  in  regard  to  deter- 
mining the  rate  of  insurance,  but  not  to  follow  them  to  the  point 
where  the  rate  of  insurance  would,  in  his  judgment  as  a  repre- 
sentative of  the  company,  be  less  than  the  hazard  involved. 

Forty  (40)  years  ago,  or  sometime  over  that  in  the  year 
1866,  to  be  exact,  the  National  Board  of  Fire  Underwriters,  was 
organized.  This  organization  had  been  projected  previous  to 
the  conflagration  at  Portland,  Maine,  which  occurred  July  4th, 
1866.  It  might  have  come  into  being  without  the  impetus  of 
that  conflagration  but  it  certainly  was  accelerated  by  that 
event.  In  all  probability  the  attempt  of  the  National  Board  of 
Fire  Underwriters  from  its  organization  in  1866  to  1872  repre- 
sented the  most  ambitious  attempt  to  control  the  rate  making 
function  that  has  been  witnessed  in  this  or  any  other  country. 
The  plan  was  ideal  since  it  provided  for  the  central  control  by 
the  National  Board.  In  addition  thereto  there  were  agents  or 
organizations  for  each  state  with  subsidiary  organizations  for 
the  more  congested  locaH ties  as  the  larger  cities  within  the  state. 
The  scheme  was  quite  successful  in  the  early  beginning  up  to  the 
years  1871  and  1872,  i.  e.,  the  business  had  recovered  from  the 
severe  losses,  especially  the  Portland  conflagration  and  as  the 
rate  making  function  was  so  deHcate  that  it  was  impossible  for 
a  central  organization  to  control  it,  there  began  to  be  mutterings 
and  the  gradual  breaking  down  of  the  rates.  This  proceeded  so 
far  that  in  the  year  1872,  the  National  Board  of  Fire  Under- 
writers  abandoned   absolutely  any  attempt   to   determine   the 


63 

rate  of  insurance,  starting  upon  its  present  career,  which  is  that 
of  working  for  the  general  welfare  of  the  business  without  in 
any  sense  entrenching  upon  the  rate  making  function.  Possibly 
this  point  would  be  as  good  as  any  to  discuss  the  subect  of  rate 
making  by  organized  effort  on  behalf  of  the  companies.  In  the 
first  place  we  would  point  out  that  the  rate  of  insurance  is  possibly 
the  most  difficult  problem  that  the  companies  are  called  upon 
to  solve.  It  is  affected  by  other  factors  than  the  measure  of 
the  physical  conditions  and  by  common  consent  or  common 
experience  the  delicate  function  of  rate  making  appears  to  be 
done  by  organized  effort. 

In  Great  Britain  the  Fire  Offices  Committee  for  nearly 
sixty-five  (65)  years  has  been  in  existence  and  performs  for  that 
country  the  work  which  the  various  exchanges  do  for  this  country. 
In  Norway  all  the  Norwegian  as  well  as  the  foreign  companies 
are  members  of  the  Tariff  Union  which  is  the  rate  making  organi- 
zation for  that  country. 

In  Japan,  where  the  Fire  Insurance  Business  is  in  its  infancy, 
a  tariff  or  rate  making  organization  was  formed  in  1897.  In 
Sweden  all  the  Swedish  stock  companies  and  nearly  all  the  foreign 
ones  belong  to  the  Tariff  Union  as  it  is  called.  It  must  be  under- 
stood that  these  organizations  in  the  countries  in  question  rep- 
resented probably  the  greater  precentage,  possibly  90%  of  the 
Fire  Insurance  Business  which  is  done  in  the  world.  To  repeat, 
almost  by  common  consent  the  business  of  Fire  Insurance, 
wherever  established  appears  to  adopt  the  form  of  making  its 
rates  by  means  of  a  traiff  organization. 

In  the  United  States  the  rate  making  function  is  practically 
done  throughout  the  country  by  a  united  effort.  In  all  of  the 
larger  cities,  Boston,  Philadelphia,  Chicago,  etc.,  there  are 
organizations  dealing  with  the  local  problem  of  rate  making. 
There  are  also  larger  organizations  for  covering  the  larger  fields 
such  as  the  New  England  Exhange,  The  Southern  Tariff  Asso- 
ciation and  like  organizations  for  the  Western  States.  These 
represent  conditions  where  the  business  is  scattered  and  is  not 
concentrated  as  it  is  in  the  larger  cities.  New  York  City,  for 
instance,  has  one-tenth  (1/10)  of  the  Fire  Insurance  business 
of  the  United  States.  The  statement  of  this  fact  is  sufficient  to 
emphasize  its  importance.  Now  why  is  there  a  necessity  for  a 
rate  making  organization  and  why  cannot  each  company  for 
itself  determine  its  rates?  As  we  stated  in  the  beginning  of 
our  paper,  if  it  were  possible  to  make  the  rate  of  insurance 
as  the  tax  rate  is  made,  i.  e.,  by  dividing  the  amount  to  be  raised 
by  the  whole  property  valuation,  the  problem  would  be  simple, 
or  again  if  the  business  were  confined  to  residence  buildings,  it 
would  be  comparatively  simple,  in  fact,  no  necessity  would 
exist  for  rating  organizations  because  in  such  buildings  as  resi- 
dences the  number  is  so  large  and  the  degree  of  hazard  so  uni- 
form that  any  company  has  sufficient  volume  both  of  premium 


64 

receipts  and  number  of  risks  to  determine  an  equable  rate. 
Concretely  expressed  there  are  in  the  United  States  about  fifteen 
(15)  million  buildings,  of  which,  in  all  probabiHty,  over  fourteen 
(14)  milHon  are  merely  ordinary  residence  buildings.  Statistics 
of  New  York  City,  of  which  I  am  possibly  more  familiar  than  with 
any  other  city,  may  furnish  a  concrete  example.  Of  the  350,000 
buildings  in  the  city,  50,000  are  subject  to  a  specific  rate,  the 
remaining  300,000  being  written  at  general  minimum  rates. 
Thus  in  this  group  of  50,000  specifically  rated  risks  there  are 
certain  classes  which  are  segregated  and  stand  apart  by  them- 
selves. They  represent  buildings  which  at  the  time  of  their 
erection  are  destined  for  a  definite  purpose  and  maintain  it 
almost  throughout  their  whole  existence.  There  are,  for  instance, 
something  like  1,700  churches,  300  hotels,  200  theaters,  100 
breweries  and  over  4,000  stables.  The  problem  of  rating,  if 
it  were  confined  to  these  definite  classes,  would  not  be  difficult. 
The  great  problem  arises,  however,  after  we  have  eliminated 
the  dwelling  and  those  specific  classes  and  have  left  about  10% 
of  the  total  number  of  buildings  in  the  city  or  country  at  large 
which  are  occupied  for  general  mercentile  or  manufacturing 
purposes.  The  problem  of  correctly  rating  the  225,000  manu- 
facturing establishments  in  the  United  States  is  one  which  taxes 
and  will  tax  the  best  thought  engaged  in  the  business  for  some- 
time to  come.  These  buildings  represent  such  variation  in 
structure,  their  occupancies  are  so  diverse  and  the  constant 
changes  so  numerous  that  the  problem  calls  for  the  united  ex- 
perience and  skill  of  the  companies.  It  erabraces  such  wide 
variation  as  a  small  one  story  frame  building  at  one  end  and 
the  modern  fireproof  department  store  at  the  other. 

The  experience  of  any  one  company  is  probably  not  sufficient 
to  determine  in  this  group  of  buildings  and  risks  what  the  rate 
of  insurance  ought  to  be.  As  a  mere  matter  of  fact  the  hazard 
involved  is  such  that  each  company  only  takes  a  small  portion 
of  the  risk  and  in  many  instances  would  be  only  too  glad  not 
to  take  any  of  it.  To  illustrate,  the  Adjustment  Committee  of 
New  York  City  which  settles  the  major  part  of  the  losses  for 
that  city,  reports  that  for  the  past  year  the  average  number  of 
companies  which  were  on  each  loss  which  the  Committee  settled 
was  ten  (10).  It  will  be  seen  from  this  simple  illustration  that 
in  order  to  write  the  insurance  on  that  risk  and  determine  the 
rate  when  application  was  made  for  insurance  each  one  of  the 
ten  (10)  companies  would  have  been  obHged  to  make  an  inspec- 
tion of  the  risk  and  determine  the  rate  for  itself.  The  rating 
organization  is  primarily  an  economic  organization.  It  does 
for  each  of  the  companies  what  each  company  would  have  to 
do  for  itself  without  such  an  organization.  It  is  only  an  extremely 
small  risk  that  one  company  will  carry  all  the  insurance.  I  recall 
that  when  San  Francisco  was  burning  and  the  insurance  market 
was  naturally  extremely  tight,  that  a  broker  desired  to  secure 


65 

$45,000  of  insurance  for  a  customer.  The  conditions  were  such 
that  no  company  would  take  more  than  $1,000  worth  of  insurance 
and  the  Hne  was  placed  in  forty-five  (45)  different  companies. 
Now  if  each  of  the  forty-five  companies  had  been  obliged  to 
compute  the  rate  of  insurance  for  itself  it  would  have  meant 
forty-five  times  the  cost  that  it  did  to  have  this  done  by  the 
central  organizations.  I  am  mindful  of  the  fact  that  in  all 
probability  the  rating  by  fire  insurance  companies  has  been,  and 
I  am  inclined  to  think,  will  be,  the  subject  of  very  severe  attacks 
by  the  different  legislatures.  As  you  propably  well  know,  there 
are  in  a  large  number  of  the  Western  States  laws  which  are 
generally  known  as  Anti-compact  Laws  and  forbid  the  making 
of  rates  by  the  fire  insurance  companies  by  a  united  effort.  In 
some  states,  of  which  New  Hampshire  is  one,  I  believe,  the  local 
companies  are  permitted  to  confer  in  regard  to  the  rate  making 
and  this  concession  probably  serves  the  purpose  of  enabling  rates 
to  be  made  by  united  efforts.  It  is  sufficient  to  state  at  this 
time  that  the  United  States  is  practically  rated  in  one  form  or 
another  by  means  of  co-operation.  Even  in  those  states  where 
the  Anti-compact  Laws  forbid  the  companies  to  do  it  directly, 
the  work  is  done  through  independent  rating  bureaus,  as  they 
are  termed,  and  these  rates  are  published  and  sold  to  the  com- 
panies. If  not  held  to  in  all  cases,  they,  at  least,  furnish  the 
company  for  a  slight  charge  the  best  judgment  in  regard  to  the 
rate  on  the  property  that  they  can  secure  without  going  to  the 
larger  expense  of  doing  the  work  themselves.  It  is  possible  that 
this  form  of  rate  making,  viz. :  by  independent  bureaus  will 
come  in  time  to  be  established  throughout  the  United  States,  but 
there  are  no  indications  at  the  present  time  that  the  feeling 
against  rating  organizations  is  any  stronger  than  it  has  been  in 
the  past.     In  fact,  if  anything,  it  is  probably  more  lenient. 

The  Dean  Schedule,  to  which  we  will  refer  later  on,  has 
done  much  for  the  entire  western  country  to  change  the  atti- 
tude of  the  law  makers  and  the  establishment  of  fire  marshal 
laws  are  helping  the  situation  a  great  deal  more.  All  of  these 
efforts  are  telling  in  the  right  direction  and  the  future  is  certainly 
full  of  interest  whatever  it  may  bring  forth. 

Turning  now  from  the  broad  consideration  of  the  problems 
let  us  consider  for  a  brief  while  the  actual  method  by  which  the 
rate  of  insurance  is  determined.  We  have  pointed  out  that  there 
were  two  methods  or  two  forms  of  rates,  viz. :  the  general  mini- 
mum rate  which  is  a  fixed  charge  for  a  certain  hazard  under 
certain  conditions  and  the  specific  rate,  which  is  based  almost 
always  upon  the  schedule.  The  general  minimum  rate  simply 
represents  the  best  judgment  of  the  organization  or  rating  bureau 
in  connection  with  the  hazard.  In  New  York  City,  for  instance, 
a  private  dwelling  occupied  by  not  more  than  two  famihes,  of 
brick  or  stone  has  a  rate  of  .10  for  each  $100  per  year  and  may 


66 

be  written  for  three  (3)  years  at  2]4,  times  that  rate.  These  are 
fixed  rates  and  are  only  subject  to  one  reduction  and  that  is  to 
10%  for  full  co-insurance. 

Passing  from  such  simple  problems  of  rate  making  and 
turning  to  the  rates  which  are  made  specifically  for  specific  risks 
at  specific  locations  we  reach  the  subject  of  schedule  rating.  Of 
schedule  rating,  as  we  understand  it  today,  there  was  but  little 
conception  fifty  (50)  years  ago,  but  in  the  tariff  issued  in  1839 
there  was  a  list  of  deficiencies  to  be  charged  for  when  rating 
warehouses  and  stores  that  contains  many  of  the  points  which 
we  now  take  into  account  in  our  schedule.  For  instance,  it 
provided  that  a  building,  if  of  brick  with  tile,  slate,  metal  or 
cement  roof,  with  brick,  stone  or  metal  gutters  with  solid  iron 
shutters  and  without  dormer  windows  or  skylights,  if  situate 
upon  a  street  not  less  than  fifty  (50)  feet  wide,  might  be  insured 
at  .30  and  charges  running  from  .01  to  .15  are  listed  which  were 
required  to  be  added  to  this  base  rate  for  deficiencies  in  any  of 
the  particulars  named,  all  of  which,  although  published  seventy 
(70)  years  ago  is  suggestive  of  the  "Standard  Building"  and 
"Deficiency  Charges"  of  present  d'ay  methods. 

An  early  rating  schedule  recognized  as  such  and  called 
by  that  name  was  developed  at  St.  Louis  in  1873  and  1874  and 
was  formally  adopted,  printed  and  put  into  operation  by  the 
St.  Louis  Board  in  1875.  Its  general  scheme  is  credited  to  Mr. 
Western  Bascom,  but  the  working  out  of  its  details  was  done  by 
Mr  .C  .T.  Aubin  at  that  time  Secretary  of  the  Board.  It  assumed 
a  "Standard  Building"  and  added  to  its  rate  deficiencies  in 
such  features  as  stairs,  area,  height  in  feet,  walls,  roof,  cornice 
skylights,  hatchways,  well  holes,  elevator  shafts,  commtmica- 
tions  and  exposures,  and  charges  were  provided  for  stocks  based 
upon  their  damageableness,  as  well  as  their  location  below  or 
above  a  certain  story.  This  schedule  provided  for  rating  of 
classes  of  business,  mercantile  and  manufacturing  and  has  done 
its  work  so  satisfactorily  that  it  is  practically  in  iorce  in  St. 
Louis  today  although  a  certain  section  has  been  rated  on  the 
Dean  Schedule. 

There  are  two  schedules,  however,  which  have  done  the 
greatest  work  of  any  schedule  that  was  ever  prepared.  The 
first  one,  the  Universal  Mercantile  Schedule  was  prepared  by 
a  committee  under  the  chairmanship  of  the  late  Mr.  F.  C.  Moore 
of  the  Continental  Insurance  Company.  It  was  tested  through 
two  years  and  some  six  editions  until  in  1893  it  was  published  in 
complete  form  and  with  modifications  it  is  now  largely  in  use  in 
the  eastern  cities. 

The_  seven  (7)  cardinal  principles  on  which  the  Universal 
Mercantile  Schedule  is  based  are  the  following : 

First  —  A  schedule  should  recognize  a  key  rate  as  a  starting 
point,  viz. :  the  rate  of  a  building  of  standard  construction  in 
a  standard  environment:     i.  e.,  in  a  city  presenting  the  most 


67 

favorable  conditions  for  the  prevention,  discovery,  extinction 
and  confinement  of  fires  to  single  buildings;  and  that  the  dif- 
ference between  the  starting  point,  or  base  rate,  of  one  city  as 
compared  with  another  should  be  explainable  by  charges  for 
variation  from  standard.  Unless  differences  between  two  cities 
as  to  the  same  character  of  structure  are  explainable,  jealousies 
and  antagonisms  will  result  in  developing  adverse  legislation. 

Second  —  Inasmuch  as  all  the  risks  of  a  city  cannot  have 
the  maximum  benefit  of  the  fire  department,  especially  where 
street  water  mains  are  -of  inadequate  sizes,  it  is  clear  that  all 
risks  in  the  city  should  not  be  rated  alike,  even  though  indent ical 
in  construction  and  occupancy,  but  that  they  should  differ 
according  to  the  sizes  of  street  mains,  proximity  to  hydrants, 
fire  engine  houses,  etc. 

Third  —  Certain  features  of  construction,  like  self -re- 
leasing floor  beams,  for  instance,  which  improve  a  building,  are  of 
no  benefit  to  the  stock.  ,  The  stock  therefore  should  not  receive 
credit  for  them  in  the  rate.  A  system  of  rating  by  adding  some 
fixed  sum  to  the  final  building  rate  to  get  the  stock  rate  must, 
by  this  process  which  recognizes  features  that  are  not  of  advantage 
to  the  stock,  result  in  an  adequate  stock  rate. 

Fourth  —  Fire  extinguishing  appliances,  especially  for 
throwing  water,  should  not  receive  credit  in  computing  the  rates 
of  stocks  to  the  same  extent  as  in  computing  the  rates  of  buildings, 
because  water  throwing  damages  stocks  to  a  greater  extent 
than  buildings. 

Fifth  —  Exposures  should  be  treated  differently  in  the 
case  of  buildings  from  stocks.  A  building  may  be  so  constructed 
as  to, be  a  complete  protection  to  its  stock,  but  require  a  charge 
in  its  own  rate  for  possible  damage  to  its  exterior,  paint,  etc. 

Sixth  —  The  rate  of  a  stock  should  approach  that  of  the 
building  containing  it  in  proportion  as  the  latter  is  of  poor 
construction,  liable  to  be  totally  destroyed,  and  in  proportion 
as  it  is  deficient  in  fire  extinguishing  appliances;  whereas  there 
should  be  a  rate  difference  between  the  rate  of  a  building  and 
its  stock  if  the  building  is  of  standard  construction  and  its  fire 
extinguishing  appliances  are  of  the  best.  And  this  difference 
in  rate  should  never  be  determined  as  a  matter  of  judgment, 
but  by  some  automatic  process  which  will  adjust  the  difference 
in  rate  to  the  conditions.  This  the  Universal  Schedule  does. 
No  other  schedule  has  provided  for  this  vitally  important  feature. 

Seventh  —  The  fire  record  of  a  city  should  be  taken  into 
account  in  computing  rates,  both  at  the  beginning  and  ending 
of  the  term  for  which  the  rate  is  computed.  The  Universal 
Schedule  recognizes  this. 

If  at  the  end  of  a  given  term  the  percentage  of  loss  to  premium 
is  less  than  55%  a  reduction  of  1%  is  made  for  each  1%  of  reduc- 
tion in  percentage;  so  that  if  the  percentage  is  reduced  to  40, 
15%   reduction  in  rate  would  be  allowed  on  renewals.     Any 


68 

system  of  schedule  rating  which  charged  for  improper  construc- 
tion (and  would  therefore  encourage  proper  construction) 
and  which  charged  for  faults  of  management  (and  therefore 
would  encourage  cleanUness  and  other  features  which  tend  to 
prevent  fires)  would  inevitably  result  in  a  reduction  of  the 
fire  loss,  and  should  be  recognized  in  the  rate  by  some  systematic 
and  equitable  percentage  of  reduction.  If  not  so  recognized, 
it  will  result  in  rate  cutting  and  demoraUzation. 

It  is  not  a  serious  question,  in  this  view,  whether  the  in- 
dividual detail  charges  of  a  schedule  arfe  too  high  or  low,  since 
it  will  be  adjusted  in  this  way  to  a  proper  basis. 

The  Dean  Schedule  in  a  sense  does  not  differ  so  radically 
from  the  Universal  Schedule,  but  it  enjoyed  one  advantage. 
The  Universal  Schedule  had  been  before  the  public  for  some 
time  and  so  the  public  mind  was  prepared  for  rating  on  a  some- 
what minute  system  of  rating  which  both  the  Dean  and  Univer- 
sal Schedules  followed.  On  this  I  wish  to  emphasize  the  point 
that  when  schedules  which  so  minutely  analyze  the  risk  as  the 
Universal  did,  we  noticed  there  was  strong  opposition  to  the 
amount  of  \^ork  involved  and  a  good  deal  of  this  had  passed 
away  when  the  Dean  Schedule  some  years  later  came  upon  the 
world.  The  schedule  differs  in  its  origin  from  the  Universal. 
It  is  very  largely  the  personal  work  of  Mr.  A.  F.  Dean,  and  was 
first  intended  for  application  in  the  small  villages  and  towns  in 
the  western  part  of  the  country.  By  process  of  changing  and 
adaptability  it  was  developed  to  the  larger  towns  and  smaller 
cities  and  finally,  as  above,  used  in  the  largest  cities  of  the  West. 

In  regard  to  the  starting  point,  corresponding  to  the  key 
rate  in  the  Universal  Schedule,  there  is  a  base  rate,  which  Mr. 
Dean  considers  as  made  up  of  those  factors  in  a  fire  loss  which 
cannot  be  reduced  to  a  system.  In  all  probability,  this  basis 
rate,  although  not  recognized  as  such,  is  in  reality  based  on  the 
fire  losses  through  a  series  of  years. 

It  is  after  it  has  passed  the  base  rate  point,  that  Mr.  Dean 
claims  the  greatest  merits  of  the  schedule  exist.  When  he  proceeds 
to  charge  for  deficiencies,  he  makes  these,  not  as  in  the  Univer- 
sal Schedule,  a  fixed  sum,  but  he  makes  them  a  percentage  of 
the  base  rate.  Thus  instead  of  charging  .10  for  the  floor  openings 
in  a  certain  condition,  Mr.  Dean  would  charge  10%  of  the  basis 
rate,  and  having  analyzed 'all  the  features  in  a  building  which 
should  be  penalized  the  whole  of  these  percentages  are  taken  of 
the  base  rate  and  added  to  it.  Thus  the  base  rate  might  be  1% 
with  60%  added  for  the  deficiency  charges,  but  the  one  thing 
which  Mr.  Dean  has  iterated  and  re-iterated  is  the  fact  that 
the  fire  loss  is  a  system  of  relations  and  that  these  relations  are 
always  a  certain  part  of  the  base  rate.  It  would  be  readily 
seen  that  under  this  system  of  rating,  the  final  rate  will  be 
affected  by  the  base  rate  which  is  adopted.  This  is  true  under 
the   Universal,    but   it   will   be   affected  more  under  the  Dean 


69 

Schedule  because  the  additions  for  deficiencies  are  always 
percentages  of  the  basis  rate  and  if  we  cut  our  basis  rate  in 
two,  then  we  cut  in  two  every  charge  in  our  list  of  deficiencies. 

In  addition  to  the  deficiency  charge  there  are  percentage 
charges  taken  of  the  base  rate  for  each  occupancy,  the  whole 
finally  being  added  to  the  base  rate,  then  we  have  the  rate 
of  the  building  occupied.  Additions  are  then  made  to  the  base 
rate  for  each  tenant  in  order  to  secure  the  rate  of  the  tenant 
itself,  these  additions  being  based  on  a  fixed  charge  according 
to  the  class  of  protection,  within  which  the  risk  falls. 

The  system  of  credit  follows  the  Universal  Schedule  and 
has  a  system  of  percentage  for  various  fire  fighting  devices, 
the  exposure  charge  being  much  simpler  in  its  operation  than 
the  Universal.  The  keynote  of  the  Dean  Schedule  and  the 
thing  on  which  Mr.  Dean  insists  is  the  law  of  relativity  which 
runs  through  the  entire  work. 

The  Dean  Schedule  has  given  much  satisfaction  through- 
out thQ  West  and  there  are  those  who  predict  that  it  will  even- 
tually cover  the  entire  country.  The  business  has  been  much 
criticised  because  in  different  parts  of  the  country,  varying 
methods  are  used  in  producing  rates.  The  Dean  Schedule 
meets  this  objection  in  the  West  at  least. 

In  bringing  our  subject  to  a  conclusion,  we  should  point 
out  that  the  mere  determination  of  the  physical  hazard  may  be, 
as  it  is,  after  all,  only  one  of  the  things  which  the  rating  organ- 
izations must  control  if  it  is  to  control  the  business  within  its 
territory.  It  must  control  the  form  under  which  the  risk  is 
insured,  since  obviously  for  a  given  rate  a  certain  privilege 
may  be  given  and  if  after  the  rate  were  made  it  were  possible 
to  give  any  privilege  desired  in  connection  therewith,  the  rate 
might  be  altogether  too  low  for  the  hazard  assumed.  There- 
fore in  its  effort  to  establish  equality,  the  rate  organizations 
are  obliged  to  keep  an  exceedingly  strict  control  of  the  general 
conduct  of  the  business  as  well  as  the  mere  making  of  rates 
based  on  local  conditions.  A  single  illustration  will  suffice, 
viz:  all  policies  within  a  given  class  must  not  only  be  issued  at 
the  same  rate,  but  they  must  have  the  same  clauses  attached. 
If  some  are  issued  without  the  co-insurance  or  average  clause 
this  single  feature  alone  would  be  a  substantial  reduction  in 
the  rate  of  insurance  to  those  who  secure  such  policies.  This 
is  true  of  all  factors  entering  into  the  problem,  and  we  must 
remember  that  the  fire  insurance  contract  is  based  not  merely 
on  the  premium  paid,  but  on  other  considerations  and  it  is 
these  other  considerations  which  are  of  as  much  primary  impor- 
tance as  the  mere  rate  itself  based  on  physical  conditions. 


Standard  Policy — Clauses  and  Forms 

First  Pat)er 

BY 

WILLIAM  B.  MEDLICOTT 
Fire  Insurance  f^orms  and  Clauses 

When  the  subject  of  these  lectures  was  first  suggested  to  the 
writer,  it  seemed  to  him  that  the  person  best  quaUfied  to  deal  with 
it  would  be  either  a  broker  of  long  experience  or  the  counter  man 
of  some  large  city  agency,  for  the  opportunities  presented  to  men 
occupying  these  positions  are  vastly  greater  than  come  to  one 
whose  principal  connection  with  underwriting  has  been  that  of  a 
Home  Office  official.  On  the  other  hand,  realizing  the  pressure 
that  is  constantly  brought  to  bear  by  the  assured  for  liberal  and 
at  times,  unjustifiable  provisions  in  a  policy  form,  the  broker  or 
the  counter  man  must  indeed  be  made  of  heroic  material  if  he 
does  not  become  deadened  to  a  sense  of  the  Insurance  Company's 
rights  and  allow  himself  to  become  accustomed  to  viewing  the 
contract  wholly  from  the  standpoint  of  the  Assured.  No  business, 
especially  one  so  far  reaching  in  its  operation  as  fire  insurance,  can 
long  prevail  or  can  work  lasting  good  to  the  entire  community, 
unless  proper  consideration  is  given  to  both  contracting  parties 
and,  it  is  more  likely  that  those  forms  which  will  best  stand  the 
test  of  time  and  use  will  be  the  ones  that  will  commend  themselves 
to  the  Underwriter  whose  desire  for  business  causes  him  to  be 
liberal  to  the  assured  and  whose  ambition  to  make  his  under- 
writing a  success  causes  him  to  exercise  a  proper  caution.  In 
speaking  to  you  then  of  forms  and  clauses,  it  will  be  my  aim  to 
emphasize  those  that  are  just  and  reasonable  to  both  parties  to 
the  contract  and  to  discourage  the  use  of  such  as  are  wholly  one- 
sided in  their  application,  in  brief,  forms  and  clauses  that  guaran- 
tee the  assured  his  rights  and  at  the  same  time  safeguard  the 
insuring  company  against  uncontemplated  or  unreasonable  risk. 

The  general  impression  prevails  that  the  Insurance  Com- 
panies are  the  authors  of  the  various  attachments  to  their  policies. 
The  actual  condition  now,  however,  appears  to  be  that  the 
assured,  the  broker,  or  the  various  state  legislatures  all  have  a 
hand  in  their  preparation.  The  Insurance  Company,  who  in  the 
event  of  loss  must  pay  the  bills,  is  virtually  situated  as  would  be 
the  manufacturer,  whose  customers  design  his  goods  and  fix  his 
prices. 


71 

Why,  you  may  say,  do  the  Insurance  Companies  allow  this? 
Some  do  not.  Competition,  that  remover  of  many  safeguards  as 
well  as  disagreements,  is  mainly  responsible  and  constantly  causes 
greater  latitude  to  be  allowed  by  the  Insurer  than  good  judgment 
can  at  times  approve. 

The  making  of  Fire  Insurance  forms  and  clauses  and  the 
selling  of  Insurance  Policies  is  not  unlike  the  making  and  selling 
of  any  other  commodity.  For  the  maker  of  or  dealer  in  any 
article  of  sale  to  insist  on  a  certain  style,  quality  or  price  for  such 
article  regardless  of  what  the  public  requires,  inevitably  means 
that  sales  will  fall  off  if  not  cease  altogether.  Also  if  the  purchas- 
er says  I  will  pay  just  so  much  and  the  article  I  purchase  must  be 
of  such  material  and  make,  regardless  of  the  cost  of  its  produc- 
tion, he  will  soon  find  himself  without  the  desired  merchandise. 
The  only  basis  on  which  permanency  and  profit  can  be  attained  for 
both  parties  to  the  contract  is  for  the  producer  to  furnish  what 
meets  the  needs  of  the  consumer  at  a  reasonable  price  above  cost. 
And  for  the  consumer  to  get  what  serves  his  purpose  at  a  price  he 
can  afford  to  pay. 

St^des  and  Costs  in  Fire  Insurance  contracts  when  Standard 
Policies  are  used  depend  wholly  on  the  forms  and  clauses  attached 
thereto.  To  secure  the  use  of  those  that  will  admit  of  a  living 
price  for  the  Insuring  Company,  and  to  furnish  the  assured  the 
protection  he  can  rightly  expect,  should  be  the  aim  of  all  respon- 
sible for  their  drafting,  selling,  and  acceptance.  In  no  other  way 
can  their  use  be  made  equitable  or  permanent. 

It  is  difficult  to  imagine  a  more  comprehensive  title  than  that 
of  Fire  Insurance  forms  and  clauses.  They  are  without  number 
and  are  constantly  increasing.  Only  the  general  forms  obtaining 
can  be  touched  on  in  these  Lectures  and  my  aim  will  be  not  so 
much  to  try  and  tell  you  how  to  devise  forms  and  clauses  as  to 
caution  you  as  to  what  to  avoid. 

Many  illustrations  will  of  necessity  be  used  in  these  talks,  and 
many  words  of  explanation  or  description  spoken  of  which  no 
record  can  be  kept  and  memory  is  too  treacherous  a  medium  to 
rely  on  in  revising  manuscript  for  publication.  Lectures  like  the 
following  necessarily  are  delivered  in  form  more  or  less  directed 
by  the  questions  asked  by  members  of  the  audience,  and  from 
the  mental  suggestions  that  come  to  a  speaker  under  the  inspira- 
tion of  an  audience  of  men  whose  life  work  is  with  the  things  that 
are  being  talked  about.  This  will  explain  in  part  the  fact  that 
these  lectures  as  delivered  and  written  may  vary  somewhat. 

Relation  of  Forms  and  Clauses  to  the  Standard  Policy. 

Those  who  attended  the  lectures  of  last  year  on  the  Standard 
Policy  were  told  of  its  various  provisions.  In  order  to  take  up  the 
subject  of  forms  and  clauses  intelligently,  it  will  be  necessary  for 
us  to  review  briefly  some  of  the  features    of  the  Standard  Policy 


72 

in  order  to  note  those  of  its  provisions  which  may  legitimately  be 
affected  by  added  forms  or  clauses  and  those  which  should  never 
be  altered  in  the  slightest  degree  in  their  purpose  and  intent.  It 
may  be  well  at  this  point  to  say  that  the  only  wise  course  is  to  do 
as  little  ''tinkering"  as  possible  with  the  Standard  policy  contract. 
Its  provisions  in  the  main  are  wise  and  equitable  and  protect  the 
rights  of  both  parties.  On  the  other  hand,  there  is  no  question 
but  what  under  certain  conditions  and  for  purposes  of  more 
clearly  defining  the  application  of  this  Standard  contract,  it  is 
wise  to  attach  such  clauses  as  shall  provide  for  special  conditions. 
For  example,  the  addition  of  any  clause  that  seeks  to  alter  or  set 
aside  the  method  of  procedure  in  the  policy  over  the  settlement  of 
a  loss  would  be  most  unwise,  illegal  and  prejudicial;  or  the  waiving 
by  rider  attached  to  the  policy,  of  the  conditions  of  cancellation 
or  the  contribution  of  other  interested  companies;  or  the  time 
that  may  elapse  between  the  adjustment  of  a  loss  and  the  pay- 
ment thereof,  should  be  absolutely  avoided.  On  the  other  hand, 
if  the  insuring  Company  sees  fit  to  grant  the  storage  of  hazardous 
materials ;  or  to  waive  the  voidance  of  the  policy  on  account  of  the 
unoccupancy  of  the  premises  under  certain  conditions ;  or  to  allow 
the  operation  of  a  manufacturing  establishment  for  longer  than 
the  usual  work-day  period,  are  privileges  that  they  undoubtedly 
have  the  right  to  grant  if  they  see  fit.  We  shall  later  take  up 
more  in  detail  some  of  the  provisions  that  can  and  those  that 
cannot  be  wisely  waived,  but  in  the  main  it  is  a  safe  rule  to  follow, 
that  the  underwriter  must  not  devise  or  accept  clauses  that 
directly  contravene  and  set  aside  the  safeguards  for  either  party, 
that  are  embodied  in  the  Standard  policy  form,  nor  should  the 
assured  demand  them. 

Authorities  on  Forms  and  Clauses. 

In  studying  this  broad  subject  of  forms  and  clauses,  one  finds 
an  almost  unlimited  field  for  research,  and  while  it  would  be  im- 
possible to  enumerate  all  of  the  sources  of  information,  I  want  at 
this  time  to  express  a  special  obligation  to  the  following  authors 
and  books: 

Richards  on  "Insurance  Law." 

Moore's  "Fire  Insurance  and  How  to  Build." 

Deitch,  "The  Standard  Policy." 

Hine's  "Book  of  Forms." 

Crawford's  "Pointers  for  Local  Agents." 

Various  Manuals  of  Rules  and  Forms  pro- 
mulgated by  the  different  Underwriting 
Bodies  here  in  the  East. 

Collection  of  forms  and  clauses  issued  by 
certain  Insurance  Companies  for  the 
guidance  of  their  Agent. 


73 

Difference  Between  Forms  and  Clauses. 

Now  what  are  Forms  and  what  are  Clauses  ?  I  do  not  know 
that  I  have  ever  seen  a  definition  broad  enough  to  clearly  define 
the  difference;  but  to  me  it  seems  in  a  general  way  as  if  forms 
were  those  attachments  or  riders  placed  on  an  insurance  policy 
that  are  descriptive  in  their  nature,  while  clauses  are  the  attach- 
ments or  riders  that  are  either  permissive  or  restrictive  in  their 
application.  By  this  I  mean  that  the  term  "form"  may  be 
properly  applied  to  that  attachment  to  the  policy  that  describes 
who  is  insured,  what  he  is  insured  against  the  loss  of,  and  where 
it  is  located;  while  clauses  may  define  what  can  be  allowed  that 
the  policy  itself  may  or  may  not  prohibit,  what  provisions  there 
may  be  over  other  interests  than  those  of  the  party  holding  the 
title  to  the  property  or  some  agreement  that  shall  fix  conditions 
of  liability  in  the  event  of  loss  occurring.  These  are  only  a  few 
of  the  permissions  or  restrictions  that  clauses  may  bring  into  the 
policy  contract  but  will  serve  for  the  present  to  illustrate  the 
line  of  demarkation  between  forms  and  clauses. 

So  far  as  I  know  there  has  never  been  an  attempt  at  a  general 
classification  of  forms  and  clauses  and  such  classification  must 
to  a  large  extent  be  arbitrary.  In  order  that  we  may  take  up  the 
study  of  forms  and  clauses  in  a  consecutive  manner,  I  have  de- 
cided to  sub-divide  them  as  follows: 

Classification  of  Forms  and  Clauses. 
Forms. 

.1.  Those  of  description,  meaning  thereby  who  is  insured 
and  against  the  loss  of  what  he  is  insured  and  where  he  is  insured. 

2.  Forms  for  other  than  fire  liability,  such  as  Use  and 
Occupancy,  Rent,  Leasehold  Interest,  Profit  Insurance,  etc. 

3.  Forms  of  extended  area  that  is  those  that  cover  the  loss 
of  certain  defined  properties  in  more  than  one  location.  Forms 
of  this  character  refer  especially  to  floaters  and  common  carriers. 

Clauses. 

1.  Clauses  of  permission,  such  as  permits  to  store  gasoline 
or  to  extend  operations  or  to  grant  builders'  permits,  etc. 

2.  Clauses  of  exemption  and  warrant,  such  as  spontaneous 
combustion  clauses,  consequential  damage  clauses,  electrical 
permit  clauses. 

3.  Clauses  of  title  and  insurable  interest,  such  as  the 
Mortgagee  Clause,  the  Leased  Land  Clause  and  the  Subrogation 
Clause. 

4.  Clauses  for  especial  emergencies,  such  as  the  Earthquake 
Clause,  the  Excess  Insurance  Clause,  Binders,  Demolition  and 
Disclaimer  Clauses. 


74 

5.  Clauses  of  liability  limitation,  such  as  the  Average 
Clause,  the  Three-quarters  Loss  Clause,  the  Three-quarters 
Value  Clause  and  the  Co-insurance  Clause. 

We  might  also  add,  judging  from  the  practice  at  the  present 
time,  another  set  of  clauses,  which  might  well  be  entitled 
"Clauses  of  Absurdity".  Clauses  of  this  nature  are  ones  such 
as  some  of  our  Western  States  seem  to  take  great  pleasure  in 
exploiting.  Also  certain  ambitious  brokers  who  can  only  view 
the  insurance  contract  from  one  side,  namely  that  of  the  assured, 
are  very  fertile  in  the  invention  of  clauses  of  this  character. 
Clauses  in  fact,  which  have  the  general  effect  of  making  the 
company  liable  for  no  matter  who  the  assured  is,  what  he  may 
do  and  when  or  where  he  does  it,  and  are  broad  enough  to 
cover  anyone,  anything,  anywhere,  at  any  time.  A  simple 
illustration  of  this  form  is  one  that  has  recently  been  brought 
out,  where  a  Sprinkler  guarantee  was  attached  to  the  policies 
with  the  provision  that  if  the  Sprinkler  was  not  kept  in  good 
working  order,  the  policy  should  not  be  voided  thereby;  a 
clause  that  contradicts  itself.  Doubtless  clauses  of  equal  absurd- 
ity have  been  exploited  by  certain  of  the  insurance  companies, 
but  for  real  ingenuity  in  the  invention  of  these  one-sided,  absurd 
and  wholly  inequitable  clauses  the  unscrupulous  and  ambitious 
broker  and  the  ignorant  law  maker  are  a  long  way  in  the  lead. 

Like  everything  else  in  this  world,  forms  and  clauses  are  good 
or  bad  and  it  should  be  our  purposes  in  studying  them  and  seek- 
ing to  learn  their  real  meaning  and  effect,  to  aim  always  to  so 
devise  and  apply  them  as  to  work  the  greatest  measure  of  good  to 
both  parties;  to  seek  to  avoid  one-sidedness  or  the  taking  of  a 
position  that  places  all  of  the  advantage  in  the  hands  of  one  of  the 
contracting  parties,  a  rule  that  should  apply  to  every  business 
contract  of  whatever  nature. 

The  Viewpoint  of  the  Loss. 

In  studying  the  working  of  any  form  or  clause,  always  take 
the  viewpoint  of  the  loss.  It  matters  but  little  what  forms  or 
clauses  are  attached  to  the  policy  if  no  loss  occurs,  but  it  means  a 
great  deal  to  one  party  or  the  other  should  such  loss  occur. 
Therefore,  seek  to  place  yourself  in  your  study  of  forms  and 
clauses,  in  the  position  that  you  would  occupy  had  a  loss  occurred 
under  the  policy  and  you  were  seeking  to  accomplish  an  equitable 
liquidation  of  the  resulting  claim. 

Provisions  of  the  Standard  Policy. 

We  must  bear  in  mind  that  the  Standard  PoHcy  is  itself, 
made  up  of  clauses  or  provisions  and  it  is  well  at  this  point  to  call 
particular  attention  to  these  provisions,  as  they  must  always  be 
considered  in  the  devising  of  either  forms  or  clauses  that  are  to  be 


75 

attached  to  the  poHcy,  since  such  supplementary  forms  or  clauses 
either  modify  the  effect  of  or  completely  set  aside  one  or  more  of 
these  -so-called  "Clauses"  in  the  Standard  Policy  form.  In 
considering  this  phase  of  the  Standard  Policy  clauses  we  will  con- 
fine ourselves  to  those  of  the  Standard  Policies  of  Massachusetts 
and  New  York  State,  the  latter  being  the  standard  of  Connecti- 
cut also,  since  in  the  main  they  embody  all  of  the  important 
features  of  any  well  drafted  policy.  You  will  note  that  the  first 
phrase  of  importance  in  either  one  of  these  forms  is  the  naming  of 
the  insurer,  the  consideration  paid  by  the  insured,  for  the  pro- 
tection offered  by  the  insurer  and  the  limitation,  or  that  is,  the 
maximum  amount  that  can  be  recovered  under  such  policy. 
Also  in  the  Massachusetts  form,  after  speaking  of  the  premium 
consideration  the  words,  "receipt  whereof  is  hereby  acknowl- 
edged" are  inserted.  Now  it  would  be  wholly  inadmissible  for 
any  clause  to  be  attached  to  a  policy  that  in  any  way  superceded  or 
set  aside  these  provisions,  unless  sanctioned  by  state  legislation 
as  has  been  the  case  in  Massachusetts,  where  the  requirement  of 
tendering  unearned  premiums  may  be  waived  under  certain 
conditions  by  the  attachment  of  a  special  rider. 

Who  is  Insured? 

The  next  phrase  of  importance  contains  the  words,  "do  or 
does  insure."  Remember  that  we  insure  people,  not  things,  and 
the  name  of  the  party  or  parties  seeking  the  protection  of  the 
policy  should  always  be  clearly  defined  at  this  point.  Also  the 
fact  and  nature  of  their  insurable  interest  should  be  beyond 
question  and  should  be  plainly  stated.  No  clause  should  be 
attached  to  a  policy  that  sets  aside  these  provisions  other  than  a 
Payee  or  Mortagee  Clause  relating  to  some  other  interest  in  the 
property  or  the  naming  of  some  party  who  shall  act  as  Attorney 
for  the  assured  with  regard  to  recovery  under  the  policy  in  the 
event  of  loss. 

What  is  Insured? 

A  description  of  the  property  for  the  loss  of  which  the  insured 
is  to  be  indemnified  naturally  follows  the  naming  of  said  insured, 
and  at  this  point  in  the  policy  the  insertion  of  a  descriptive  form 
or  rider  is  necessary.  This  form  ordinarily  describes  the  nature 
and  the  location  of  the  property,  but  in  the  event  of  the  indemnity 
offered  being  for  other  than  direct  loss  by  fire,  that  is  for  insurance 
of  the  Use  and  Occupancy,  Rent,  Leasehold  Interest,  Profit,  etc. 
type,  it  is  necessary  to  define  the  nature  of  this  insurance  in  con- 
nection with  the  description  of  the  property  covered.  It  is  also 
usual  to  attach  to  this  form  of  description,  such  further  clauses  of 
permission,  restriction  or  limitation  as  may  be  mutually  agreed 
upon. 


76 

Term  of  the  Insurance. 

The  period  for  which  the  contract  shall  run,  or  the  term  of 
the  insurance,  is  one  of  the  policy  provisions  that  it  would  be 
absurd  to  seek  to  amend  or  alter  by  means  of  any  attached  rider. 

VoiDANCE  Provisions  of  the  Policy. 

Following  the  description  of  the  property  we  find  in  the 
policy  contract  a  number  of  provisions  defining  conditions  under 
which  the  company  shall  not  be  liable,  in  other  words,  voidances, 
such  as  concealment,  or  misrepresentation  or  the  storage  of 
hazardous  or  inflammable  compounds,  or  the  conduct  of  any  extra 
hazardous  business.  Also  losses  that  might  be  occasioned  by 
invasion,  insurrection,  riot,  civil  war,  military  or  usurped  power 
or  theft  or  neglect  of  the  assured  to  use  reasonable  means  for 
saving  or  preserving  property.  Any  of  these  have  the  effect  of 
rendering  the  contract  void  and  freeing  the  insuring  company 
from  liability.  Clauses  waiving  any  or  all  in  fact  of  these  features 
are  clearly  within  the  right  of  the  company  to  attach  to  their 
policies  if  they  so  elect. 

May  Assume  Liability  for  Damage  by   Lightning. 

The  assumption  of  liability  for  damage  caused  by  lightning, 
not  covered  by  the  Standard  policy  contract  is  also  a  condition 
that  the  insurer  clearly  has  the  right  to  assume  by  the  attachment 
of  a  proper  clause,  if  he  so  elect. 

Provision  for  Cancellation  Cannot  be    Changed. 

That  portion  of  the  policy  providing  the  way  in  which  it  may 
be  cancelled,  it  is  clearly  evident,  neither  insurer  or  insured  has 
any  right  to  change  nor  may  either  rightfully  claim  any  other 
method  of  procedure  than  that  defined  in  the  Standard  Policy 
contract,  and  a  clause  seeking  to  effect  such  change  would  be 
clearly  out  of  place. 

Other  Insurable  Interests. 

Mortgagee  interests  may  be  recognized  and  therefore  form  a 
proper  subject  for  the  attachment  of  a  clause  to  the  standard 
policy  contract. 

Provisions  Over  Removal. 

The  removal  of  property  endangered  by  fire  to  a  place  of 
safety  as  provided  in  the  standard  policy,  is  one  that  would  not 
reasonably  admit  of  the  attachment  of  any  clause  to  the  policy 
waiving  its  provisions,  and  it  is  most  unlikely  that  anyone  would 
seek  to  devise  such  a  clause. 


77     . 

Provisions  for  Arbitration  Cannot  be  Changed. 

The  clause  in  the  contract  relating  to  the  way  in  which  losses 
shall  be  adjusted  and  paid  is  one  that  sutely  admits  of  no  altera- 
tion or  amendment  by  the  addition  of  attached  clauses. 

In  short,  those  features  of  the  policy  that  define  clearly  its 
limitations  and  the  methods  of  procedure  thereunder,  do  not  with 
any  sense  of  equity,  admit  of  alteration  or  amendment  by  the 
attachment  of  clauses,  while  permission  to  waive  certain  policy 
provisions  that  are  designed  to  safeguard  the  insurer  against 
unusual  hazards,  or  the  protection  of  interests  other  than  those 
of  the  party  holding  title  to  the  property  are  clearly  provisions 
that  admit  of  special  treatment  such  as  can  only  be  accorded  by 
the  addition  of  proper  clauses.  Furthermore,  clauses  defining 
the  relation  between  insurance  carried,  sound  value  and  loss,  are 
all  of  them  perfectly  proper  and  admissible,  provided  both  parties 
agree  thereto. 

This  in  a  broad  way  defines  what  may  and  what  may  not  in 
the  Standard  policy  form,  be  altered  or  modified  by  the  use  of 
attached  forms  or  clauses,  and  in  devising  forms  or  clauses  to 
meet  special  emergencies,  those  features  of  the  policy  which  we 
have  mentioned  as  being  distinctly  inadmissible  of  alteration, 
should  always  be  borne  in  mind  by  one  who  is  drafting  a  form  or 
clause. 

Desirability  of  UNiFORMitv  in  Forms  and  Clauses. 

It  is  well  at  this  time  to  emphasize  the  importance  that  at- 
taches to  standard  and  uniform  forms  and  clauses.  Forms  of 
description  must  of  course  vary  with  every  different  property  or 
assured  covered,  but  clauses  of  permission,  of  liability  limitation, 
of  the  assumption  of  other  than  fire  liability,  or  for  special  emer- 
gencies should  adhere  closely  to  some  prescribed  standard  that 
meets  not  only  the  views  of  the  underwriter,  but  also  commend 
themselves  to  the  insuring  public  as  a  whole. 

Before  we  begin  on  a  detailed  study  of  the  various  kinds  of 
forms  and  clauses,  there  are  a  few  matters  of  general  instruction 
both  in  policy  writing  and  in  the  devising  of  forms  and  clauses 
that  had  best  be  first  disposed  of. 

The  Contract  One  of  Personal  Indemnity. 

A  Fire  Insurance  policy  is  essentially  a  contract  of  personal 
indemnity.  It  is  true  that  some  of  our  State  Legislatures  in  their 
ignorance  have  seemingly  lost  sight  of  this  fact,  but  it  is  a  fact, 
and  any  other  view  is  a  perversion.  Remembering  this,  that  the 
policy  is  a  contract  of  indemnity  never  devise  or  consent  to  the 
use  of  a  form  that  makes  it  a  contract  of  another  sort,  that  is, 
avoid  all  forms  and  clauses  that  introduce  the  valued  feature  into 
a  policy  contract.     Possibly,  to  some  of  you,  it  is  not  wholly 


78 

clear  just  what  is  meant  by  "valued."  It  means  the  so  wording 
of  the  contract  that  in  the  event  of  a  total  loss,  the  value  of  the 
destroyed  property  is  the  amount  of  insurance  thereon,  wholly 
irrespective  of  what  its  actual  value  may  be.  Policies  of  this  sort 
are  a  premium  on  fraud,  a  menace  to  the  community,  become 
ultimately  a  tax  burden  to  policy  holders  as  a  whole  and  tend  to 
lower  the  moral  standard  of  the  locality  in  which  they  prevail. 

We  ordinarily  think  of  the  valued  policy  as  applicable  only  to 
buildings,  since  they  are  the  class  which  the  law  has  generally 
made  applicable  to  a  contract  of  this  sort,  still  almost  unknowing- 
ly at  times,  forms  are  allowed  to  slip  through  that  contain  this 
same  pernicious  valued  feature.  For  example  any  form  or  clause 
that  states  that  in  the  event  of  a  loss,  a  certain  fixed  sum  for 
certain  specified  articles  is  agreed  upon  to  be  their  actual  value, 
entirely  sets  aside  the  important  indemnity  feature  of  the  contract 
and  may  work  great  injustice  and  ill,  usually  to  the  insurer,  but 
sometimes  to  the  insured.  Again  forms  or  clauses  that  aim 
to  fix  the  insurable  value  of  articles  destroyed  (regardless  of 
who  the  insured  may  be)  as  being  the  market  price  for  such 
articles  at  the  time  of  loss,  may  work  contrary  to  the  principle  of 
indemnity  that  should  never  be  lost  sight  of,  since  in  this  obscure 
way  profits  are  oftimes  being  insured  as  well  as  the  direct  fire  loss 
or  damage.  Illustrations  could  be  multiplied  indefinitely  of  the 
way  in  which  this  valued  feature  creeps  into  the  wording  of  forms 
and  clauses,  sometimes  innocently  though  more  often  with  intent 
on  the  part  of  the  framer  of  the  form,  and  it  is  always  desirable 
to  bear  in  mind  in  the  devising  of  any  clause,  descriptive  or 
otherwise,  to  see  to  it  that  this  pernicious  principle  shall  not 
even  in  the  least  degree  prevail. 

The  Headings  of  this  Policy. 

Just  a  few  general  instructions  as  to  what  might  be  termed 
the  "heading  of  a  policy"  and  we  will  then  proceed  to  the  direct 
subject  of  forms  and  clauses.  The  policy  writer  at  the  outset 
has  before  him  a  printed  form  or  contract,  the  Standard  policy  of 
the  State  in  which  the  insured  property  is  located,  and  his  first 
attention  should  be  to  enter  clearly  the  amount  or  limitation  of 
the  policy.  Coupled  with  this  is  the  consideration  or  premium 
for  which  the  policy  in  question  is  issued,  this  bears,  by  virtue  of . 
the  rate,  a  certain  fixed  relation  to  the  amount.  Then  follow 
the  words  "does  insure"  or  "do  insure"  and  the  name  of  the 
insured  party,  and  the  entering  therein  of  this  name  calls  for 
more  careful  consideration  than  often  times  is  given  it.  Avoid 
initials,  write  the  name  or  names  as  fully  as  possible.  Avoid  am- 
biguous phrases,  such  as  "Heirs  of  So  and  So"  or  "So  and  So,  et. 
al.,"  unless  at  the  same  time  you  designate  some  one  party  who 
is  empowered  to  act  for  all .  It  is  easy  to  foresee  the  embarrassment 
and  trouble  that  may  arise  in  the  event  of  a  loss  under  policies 


79 

where  this  broad,  vague  way  of  defining  the  insured  parties  may 
appear.  In  the  case  of  **  Heirs  of"  it  is  at  times  impossible  to  know 
who  all  of  the  heirs  are  and  should  a  loss  be  settled  without  the 
concurrence  of  each  one  of  them,  and  possibly  be  paid,  there  is 
nothing  to  hinder  the  ignored  heir  later  on  from  turning  up  and 
justly  claiming  and  probably  securing,  recognition  of  his  or  her 
rights  with  accompanying  repayment  of  his  share.  The  "et  al" 
feature  which  sometimes  appears  where  there  are  several  owners 
can  easily  lead  to  the  same  confusion  and  possibly  double  pay- 
ment, since  "et  al"  is  a  very  difficult  party  to  locate  with  cer- 
tainty. 

Not  only  is  it  necessary  to  name  the  Assured  in  a  clear  and 
unmistakable  manner  but  in  the  event  of  his  interest  in  the 
property  being  other  than  that  of  sole  and  unconditional  owner- 
ship, such  fact  must  be  clearly  brought  out.  In  cases  where 
there  are  joint  interests  or  where  individuals  are  transacting 
business  under  a  trade  name,  the  nature  of  the  Assured 's  interest, 
in  the  former  case,  and  the  individual  names  as  well  as  trade 
name,  in  the  latter  instance,  should  be  clearly  entered  upon  the 
policy. 


Standard  Policy — Clauses  and  Forms 
Second  Pat)er 

BY 

WILLIAM  B.  MEDLICOTT 
Forms  of  Prot)erty  Description  and  L/Ocation 

Who  IS  Insured? 

In  our  last  lecture  we  spoke  of  "who"  was  insured  and  in  a 
general  way  touched  upon  the  various  provisions  of  the  Standard 
policy  contract  as  a  whole.  Certain  things  that  it  was  desirable 
to  avoid  in  defining  "who"  the  Assured  is,  have  also  been  spoken 
of.  Now,  naturally  follows  "what"  is  it  that  we  insure  these 
parties  against  the  loss  of  ? 

We  must  again  impress  upon  your  minds  the  question  of 
viewpoint  or  attitude  that  it  is  always  essential  to  take  in  devising 
a  form  that  is  to  be  attached  to  the  policy  contract.  The  view- 
point of  the  loss  is  the  only  safe  one  to  take.  Look  at  the  form 
that  you  devise  as  you  would  had  a  loss  occurred  on  the  property 
which  it  is  designed  to  cover.  Any  other  point  of  view  is  value- 
less. 

Another  fact  to  remember  in  the  drafting  of  any  contract 
form  is  that  such  form,  if  the  contract  is  to  be  a  thoroughly 
satisfactory  one,  must  represent  the  idea  that  is  in  the  minds  of 
both  parties  to  the  contract,  that  is,  the  contract  should  always 
consummate  by  the  getting  together,  as  we  might  say,  of  the 
minds  of  these  two  parties.  A  contract  that  means  one  thing  to 
one  of  the  contracting  parties  and  another  thing  to  the  other  is  a 
trouble-breeder  that  is  most  prolific. 

What  is  Insured? 

In  speaking  of  the  forms  that  are  attached  to  the  policy  con,- 
tract,  we  termed  them  as  being  riders  that  are  descriptive  in  their 
nature,  and  in  the  first  class  of  such  forms  are  those  that  des- 
cribe the  property  for  the  loss  or  damage  to  which  by  fire,  the 
Insured  ig  to  be  indemnified.  While  forms  determine  also,  the 
nature  of  the  indemnity  offered  if  other  than  that  of  direct  fire 
loss,  such  for  example  as  Use  and  Occupancy,  it  is  our  purpose 
at  this  point  to  confine  our  attention  to  those  forms  that  describe 
the  property  itself,  wholly  irrespective  of  whether  the  covering 
is  against  direct  loss  by  fire  or  loss  of  some  other  nature. 


81 

It  is  the  form  also  that  determines  whether  the  insurance  is 
to  be  of  the  specific  or  of  the  blanket  or  compound  type,  or  whether 
the  Policy  is  to  be  of  the  usual  kind  or  an  open  one  or  a  floater, 
that  is,  whether  it  limits  the  property  covered  to  that  of  one  kind, 
in  one  described  location,  or  of  several  kinds  in  several  described 
locations  or  for  a  fixed  or  a  variable  limit  in  amount  covered,  or 
anywhere  within  certain  more  or  less  widely  defined  limits. 

Now,  while  you  all  p^robably  know  just  what  we  mean  by 
a  specific  and  what  by  a  compound,  as  well  as  by  an  open  and 
by  a  floating  policy,  still,  possibly  some  of  you  do  not,  and  so 
we  will  try  and  define  the  same. 

A  SPECIFIC  POLICY  is  onc  that  covers  property  of  one  kind 
or  class  in  one  fixed  location,  or  that  applies  to  an  aggregate  sum 
apportioned  in  fixed  amounts  between  various  different  prop- 
erties, or  in  various  defined  locations.  For  example,  a  policy 
of  $5,000  on  one  buildirig  alone  is  specific,  or  for  $5,000,  stating 
that  $2,500  each  is  to  apply  on  two  described  buildings  is  also 
specific. 

Blanket  or  Compound  Policies. 

A  Blanket  or  Compound  policy  is  one  offering  a  contrast 
to.  the  Specific  form,  in  that  it  covers  properties  of  different 
classes  or  in  different  locations  without  apportionment  or  dis- 
tribution, as,  for  example,  a  policy  of  $5,000  on  a  manufac- 
turing plant  in  its  entirety,  including  buildings,  machinery  and 
stock,  but  not  defining  how  much  is  insured  on  each  one  of  these 
items,  or  if  the  plant  includes  more  than  one  building,  how 
much  is  insured  in  or  on  each  one  of  these  buildings. 

Open  Policy. 

An  open  policy  may  be  either  specific  or  blanket  in  its 
application.  It  is  a  policy  that  is  sometimes  called  a  "running" 
policy  and  it  is  used  where  the  assured  will  be  likely  to  require 
many  successive  insurances  from  the  same  company.  It  covers 
properties  (usually  merchandise)  in  such  amounts  and  in  such 
places  (usually  ware-houses)  and  at  such  rates  of  premium  as 
shall  from  time  to  time  be  agreed  upon  and  endorsed  on  the 
policy,  or  in  a  book  attached  to  the  same.  The  object  of  such 
a  policy  is  to  do  away  with  the  procuring  of  a  new  policy  for 
every  transaction.  Policies  of  this  form  are  most  frequently 
used  where  stocks  of  merchandise  are  continually  being  placed 
in  or  withdrawn  from  a  storage  warehouse. 

A  Floating  Policy. 

A  Floating  policy  is  one  that  is  very  broad  and  general 
in  its  application,  since  it  may  cover  certain  specified  properties 
anywhere  within  more  or  less  widely  defined  limits.     Such  prop- 


82 

erties  cannot  be  specifically  described  because  of  constantly 
changing  quantities  and  locations,  such  as  merchandise  or 
other  property  in  transit.  The  amount  covered  under  such 
a  form  of  policy  can  only  be  determined  at  the  time  of  loss 
under  the  same.  A  popular  definition  of  a  Floater  policy _  is 
that  it  is  one  that  hovers  over  a  property  until  at  some  point 
that  property  is  subjected  to  a  fire  and  then  lights  on  the  fire. 

Excess  Policies. 

An  Excess  policy  is  also  something  of  a  Floater,  in  its 
nature  and  only  attaches  to  insured  property  to  an  excess  of 
value  that  the  direct  insurance  on  that  property  does  not  cover. 

Description  of  Property. 

In  drafting  the  form  that  shall  describe  clearly  and  con- 
cisely the  property  covered,  the  greatest  care  should  be  used. 
Just  what  is  covered  should  be  made  clear  beyond  question, 
and  not  only  should  the  intent  of  the  Contracting  Parties 
be  clear  in  the  mind  of  the  framer  of  the  form  but  the  expres- 
sions used  in  drafting  such  forms  should  leave  no  doubt  as  to 
what  that  intent  was.  There  is  nothing  more  annoying  to 
both  Insurer  and  Insured  than  to  have  a  dispute  arise  over  a 
loss  on  the  ground  that  something  not  defined  in  the  policy 
was  meant  to  be  covered  by  the  form  used,  but  which  apparently 
was  not.  Policy  writers  who  fall  into  this  too  common  error, 
are  members  of  that  dangerous  class  of  humanity  who  "mean 
well"  but  do  not  "do  well"!  One  feature  of  the  form  that  must 
always  be  kept  in  mind,  is  that  if  there  is  a  discrepancy  in  an 
insurance  contract  between  the  Standard  policy  provisions 
and  the  written  form  or  rider  attached,  the  latter  will  always 
prevail  because  it  will  be  assumed  by  the  Courts  that  such 
riders  are  inserted  with  reference  to  the  special  printed  contract 
to  which  they  are  attached,  and  therefore  supercede  it.  This 
is  another  reason  for  care  in  drafting  any  form  that  is  to  become 
a  part  of  the  policy  contract. 

A  form  in  the  sense  that  we  are  now  considering  it,  namely 
that  of  an  instrument  of  description,  does  not  tend  to  set  aside 
any  of  the  printed  provisions  of  the  Standard  policy.  That 
function  is  confined  to  clauses  as  we  have  defined  them.  Even 
with  this  distinction  though,  the  importance  of  forms  is  not 
lessened,  for  if  the  form  be  bad,  no  amount  of  modifying  clauses 
can  set  it  right,  and  can  only  result  in  a  contract  that  is  full 
of  contradictions.  Then  too,  the  Underwriter  in  considering 
any  risk,  first  looks  at  the  form  and  if  that  is  bad,  either  inthe 
description  of  the  property  covered  or  the  way  in  which  it  applies, 
he  usually  gives  no  further  consideration  to  the  offering,  but 
turns  down  the  whole  proposition.      Forms  present  more  oppor- 


83 

tunity  for  the  ingenuity  of  the  poHcy  writer  than  clauses,  since 
the  latter  are  usually  standard  to  the  extent  of  every  word 
used  in  them  while  forms  are  necessarily  to  a  large  extent, 
optional,  and  even  where  standards  are  used,  in  the  preparation 
of  forms,  it  is  more  a  standard  of  arrangement  and  classifica- 
tion than  of  prescribed  descriptive  language. 

In  the  framing  of  forms,  it  must  ever  be  kept  in  mind  by 
the  policy  writer  that  if  there  is  any  ambiguity  in.  the  expres- 
sion or  description  used  and  litigation  should  ensue,  the  Court 
will  always  decide  in  favor  of  the  Insured  party  where  any  other 
than  one  interpretation  is  possible.  This  attitude  on  the  part 
of  the  Courts  is  not  unreasonable,  since  the  issues  that  arise 
under  forms  in  dispute  are  always  on  those  designed  to  protect 
the  Insurer,  and  if  they  are  doubtful,  such  doubt  might  tend  to 
invalidate  the  entire  contract.  Then  too,  the  contract  is  always 
made  by  the  Insurer  and  is  prepared  on  the  good  faith  of  the 
Insured. 

Forms  are  seldom  drafted  by  the  party  who  has  to  adjust 
the  loss  for  the  Company  if  one  occur.  This  too,  calls  for  care 
on  the  part  of  the  policy  writer.  Words  should  be  used  by  him 
that  will  be  as  clear  to  the  adjuster  and  to  the  insured  as  they 
are  to  the  party  who  framed  them.  The  Standard  policy, 
framed  as  it  was  by  the  best  of  legal  and  underwriting  talent 
available,  often  has  its  wisest  provisions  entirely  set  at  naught 
by  the  ignorant  act  of  an  inexperienced  form  writer. 

An  old  underwriter  once  said  that  **if  the  Standard  policy 
was  drafted  in  Heaven,  the  Devil  himself  must  have  been  the 
author  of  many  of  the  forms  and  clauses  that  are  in  use."  Ex- 
perienced adjustors  probably  have  no  doubt  of  this,  for  care- 
lessly drawn  forms  cause  much  to  be  said  and  done  that  will 
surely  tend  to  swell  the  ranks  of  the  followers  of  the  Prince  of 
Evil. 

The  company  whose  forms  are  blindly  or  carelessly  drawn, 
suffers  both  in  the  trouble  that  ensues  therefrom,  in  the  busi- 
ness they  get  and  even  more  from  the  business  that  they  do 
not  get,  owing  to  the  ill  reputation  they  have  acquired. 

Now,  what  are  some  of  the  evils  that  result  from  care- 
lessly drawn  forms  of  property  description?  Such  description 
must  tell  what  the  property  is  and  where  it  is.  This  surely 
seems  easy,  but  how  often  the  adjuster  finds  himself  in  grave 
doubt  as  to  these  very  features  owing  to  a  doubtfully  worded 
form. 

Some  of  the  troubles  that  arise  from  poor  wording  of  the 
"what"  in  a  form  are  the  comprehensiveness  of  the  description. 
In  his  desire  to  cover  all  the  insured  ought  to  have  covered, 
the  policy  writer  may  draw  up  a  form  that  can  easily  be  con- 


84 

strued  to  include  things  never  intended  to  be  included,  and 
oftentimes,  even  those  that  are  prohibited.  For  instance, 
the  phrase,  "stock  of  drugs"  can  be  held  to  include  gasolene 
of  any  amount. 

Trouble  Breeding  Phrases. 

"Such  other  goods  as  are  usually  carried  for  sale"  is 
another  description  of  property  that  is  very  desirable  to  avoid. 
What  does  "usually  carried"  really  mean?  Take  for  illustration 
the  contents  of  a  general  store.  Pretty  much  everything  salable 
at  some  time  or  other  is  handled  in  such  a  store  and  a  form  that 
winds  up  with  the  above  phrase  would  hold  the  insurance  com- 
pany liable  for  explosives  or  volatile  oils  kept,  even  though 
it  was  not  the  intent  of  the  agent  to  cover  them,  even  though 
the  insurance  company  had  no  idea  such  hazardous  materials 
were  a  part  of  the  stock  carried,  even  though  the  rate  on  the 
property  was  made  with  no  contemplation  of  the  existence 
of  such  hazards  and  even  though  they  might  prove  to  be  the 
direct  cause  of  the  destroying  fire.  The  agent  who  loves  to 
use  this  broad  phrase  in  order  to  be  sure  and  get  everything 
his  customer  has  or  may  have  under  cover  would  probably 
say,  "Why,  it  is  not  usual  to  keep  such  hazardous  things,  so 
my  form  does  not  cover  them."  It  does  though,  for  even  if 
in  some  places  a  special  rate  is  made  and  an  additional  premium 
charged  for  the  extra  hazard  of  their  presence,  and  perhaps 
they  might  be  clearly  specified  too  in  the  form,  it  establishes 
the  fact  to  the  Courts  at  least,  that  it  is  not  unusual  to  find  such 
merchandise  kept  in  the  stock  of  general  traders. 

"Usages  of  their  trade.''  The  word  "usage"  is  one  we 
often  find  in  insurance  forms  and  one  that  is  easily  capable 
of  mis-interpretation.  We  know  that  forms  devised  for  special 
lines  of  either  mercantile  or  manufacturing  business  probably 
seek  to  conform  to  the  usages  of  the  trade  protected,  and  to 
consider  the  special  practices  and  privileges  that  such  trade 
might  require,  perhaps  these  requirements  are  constant  in  the 
business,  perhaps  they  are  only  occasional  or  temporary  but 
if  necessary  to  the  conduct  of  the  special  business  to  which 
they  apply,  the  fact  that  they  are  temporary  rather  than  con- 
stant, does  not  void  the  contract.  Bar  then,  whenever  possible, 
the  use  of  this  word  "usage",  as  it  may  be  more  comprehensive 
than  the  policy  writer  intended. 

This  makes  it  all-important  that  the  policy  writer  in  draft- 
ing a  form  to  cover  a  certain  manufacturing  plant,  for  illustra- 
tion, does  not  incorporate  the  phrase,  "and  all  other  materials 
necessary  for  their  use,''  or  "incident  to  the  prosecution  of  their 
business,"  unless  he  knows  absolutely  what  such  materials  are 
and  whether  they  involve  hazards  not  contemplated  by  his 
insuring  company  in  issuing  the  policy,  nor  features  considered 


85 

in  the  fixing  of  the  rate.  The  same  caution  should  exist  in  draft- 
ing a  form  covering  the  insurance  allowing  the  insured  to  carry 
on  ''such  processes  as  are  incident  to  his  business.''  Not  only 
should  the  policy  writer  be  absolutely  certain  of  his  own  posi- 
tion and  understanding  when  he  uses  these  expressions,  but  he 
should  be  equally  sure  that  the  insured  party  knows  them  just 
as  clearly  and  as  fully  as  himself,  and  that  their  understanding 
agrees.  Under  such  conditions,  the  use  of  such  articles  and 
processes  may  lead  to  no  difficulties  in  the  event  of  loss,  without 
it,  trouble  is  more  likely  to  arise,  since  "incident  to  his  business" 
is  a  very  comprehensive  phrase. 

For  instance,  suppose  you  have  a  form  describing  a  certain 
manufactory  producing  advertising  novelties.  Trade  conditions 
have  brought  the  use  of  celluloid,  often  in  its  most  highly  com- 
bustible form  into  more  or  less  common  use  in  processes  of  this 
sort.  A  line  in  the  form  .describing  in  a  general  way  the  property 
covered  and  closing  with  the  words,  "and  all  other  articles 
or  materials  incident  to  his  business"  would  allow  the  assured 
to  use  this  hazardous  celluloid,  though  probably  the  factory 
had  been  rated  when  no  such  extra  hazard  existed,  nor  from 
the  form  used  would  the  Insurance  Company  realize  that  they 
were  taking  on  an  uncontemplated  hazard.  A  form  like  this 
can  only  be  safe  for  the  insurer  when  there  is  an  insertion  or 
addition  calling  special  attention  to  the  possible  use  of  cellu- 
loid or  other  hazardous  materials. 

The  use  of  the  words  ''merchandise''  or  "contents"  without 
any  explanation  or  restriction  is  another  most  unwise  practice 
in  devising  forms.  What  is  "merchandise?"  Anything  in  the 
way  of  stocks.  "Contents"  is  even  more  comprehensive,  since 
it  may  cover  machinery  as  well  as  any  form  of  stock.  So  the 
insuring  of  merchandise  or  contents  without  restriction  for  any 
party  may  be  construed  to  cover  anything  from  pig  iron  to 
benzine  or  from  fire  bricks  to  millinery,  should  the  insured 
elect  to  keep  them !  Possibly  you  think  this  is  too  palpable 
an  error  for  anyone  of  even  moderate  sense  to  write  into  a  policy 
form  or  to  even  think  of  committing,  but  as  I  wTite  this,  I  have 
before  me  a  form  used  in  some  extent  in  a  nearby  state,  reading 
"on  all  the  contents  pertaining  to  or  used  in  the  business  of 

the  assured,  contained  in  the  brick  building,  situated , 

occupied  as  ware-house  and  work-room."  This  is  an  actual 
form  in  use.  You  will  note  it  does  not  even  specify  the  business 
of  the  assured.  Investigation  in  this  particular  case  revealed 
the  fact  that  his  business,  was  ware-housing,  which  made  the 
form  even  worse.  Can  you  think  of  any  class  of  materials,  or 
any  process  of  manufacture  or  any  custom  of  trade  that  such 
a  form  would  not  cover?  To  submit  one  like  this  the  broker 
or  policy  writer  must  be  either  a  fool  or  a  knave  —  to  accept 
it  the  underwriter  is  beyond  question,  the  former. 


86 

Possibly  the  broker  may  say  it  is  duty  to  get  just  as  much 
for  his  insured  as  he  can  and  to  secure  for  him  a  form  that  will 
cover  every  possible  emergency,  no  matter  what  his  assured 
may  elect  to  do.  Within  reason,  probably  such  attitude  on  the 
part  of  the  broker  is  all  right,  but  where  the  aim  is  to  over-reach 
in  the  manner  that  is  evidenced  by  such  a  form  as  the  one  just 
quoted,  it  reveals  a  condition  too  unfair  and  unreasonable  to  be 
recognized.  A  condition  that  will  shortly  regulate  itself  and 
enable  the  broker  to  provide  his  assured  only  with  policies  of 
sub-standard,  carelessly  managed,  plunging  insurance  companies. 
In  the  event  of  loss,  also,  such  a  comprehensive,  over-reaching, 
unrestricted  form  would  be  sure  to  create  dissatisfaction  and 
not  unlikely  litigation,  since  there  is  also  a  doubt  as  to  just  what 
such  a  form  really  does  mean. 

Another  phrase  at  times  misused  in  defining  property  covered 
is  that  of  ''held  in  trusts  This  comes  in  the  lines  that  generally 
follow  a  listing  of  the  property  described  and  usually  reads, 
after. defining  such  property,  "their  own  or  held  by  them  in  trust 
or  on  commission  or  sold,  but  not  delivered."  Expounders  of 
the  law  and  adjusters  find  at  times  in  this,  a  case  for  disagree- 
ment as  to  just  what  this  phrase  really  does  mean.  It  is  not 
strange  that  this  is  so,  since  some  policy  writers  who  are  probably 
carried  away  with  the  sort  of  euphonious  legal  sound  of  the 
words  used,  incorporate  them  into  property  forms,  where  their 
use  was  not  only  never  intended  but  where  it  is  wholly  out  of 
place.  This  phrase  can  rightfully  be  used  in  policies  of  carriers, 
ware-house  men,  commission  and  other  merchants,  to  show  that 
the  assured,  though  holding  the  property  of  others,  can  secure 
the  full  measure  of  insurance  upon  all  the  property  insured, 
whether  the  title  is  vested  in  them  or  not.  The  words  "held 
in  trust"  simply  mean  that  the  goods  or  the  property  are  in  the 
custody  or  care  of  the  Insured.  He  may  hold  them  as  an  agent 
or  in  any  other  capacity,  and  so  long  as  he  is  responsible  for 
their  care  and  preservation,  the  right  under  these  words  is  granted 
to  him  to  protect  that  right  by  insurance.  We  might  call  it  a 
phrase  of  privilege,  since  it  grants  a  benefit  to  the  party  holding 
the  property  even  when  the  title  to  it  is  not  in  his  own  name. 
It  supercedes  the  restriction  in  the  body  of  the  standard  policy 
as  to  the  insurable  interest  being  that  of  sole  and  unconditional 
ownership.  Were  we  discussing  it  separately  from  the  form  of 
property  described  into  which  it  is  incorporated,  we  would  say 
it  was  a  permissive  clause  relating  to  title  and  insurable  interest. 

Under  these  words  in  the  form,  the  assured  can  collect  the 
whole  amount  due  under  the  policy 'and  may  return  to  the  real 
owner  the  amount  due  over  the  insurable  interest  that  he,  the 
assured,  may  have  as  agent  or  trustee.  The  real  owner,  even 
though  he  may  not  have  known  of  the  existence  of  the  insurance, 
may  rightfully  benefit  by  it  after  the  loss.  For  illustration, 
let  us  take  the  case  of  the  ordinary  commission  merchant  hand- 


87 

ling  textile  goods.  The  mills  he  represents  dehver  their  goods 
to  him  in  advance  of  their  actual  sale  being  consummated  and 
in  many  cases  the  commission  merchant  makes  cash  advances 
to  the  manufacturer  to  enable  the  latter  to .  continue  turning 
out  his  product.  While  these  goods  that  are  thus  being  held 
as  collateral  by  the  commission  merchant  for  these  advances, 
are  in  his  custody,  it  is  the  custom  of  trade  for  him  to  keep  them 
insured,  in  fact,  he  often  contracts  to  do  so.  They  are  held  by 
him  in  trust  or  on  commission.  In  the  event  of  a  loss  occurring, 
such  loss  must  be  adjusted  with  him  and  whatever  recovery 
is  made,  is  payable  to  him.  From  the  insurance  money  received 
he  can  rightfully  deduct  the  advances  which  he  has  made  to 
the  manufacturer  on  the  destroyed  goods  and  remit  whatever 
is  recovered  from  the  Insurance  Companies  over  and  above 
the  advance  to  said  manufacturer  who  is,  therefore,  fully  indemni- 
fied for  the  loss  he  has  sustained.  This  is  one  of  the  conditions 
that  arise  where  due  care  must  be  taken  to  see  that  double 
insurance  is  not  effected  and  that  —  to  carry  out  the  illustration 
used  —  the  commission  merchant  and  the  manufacturer  have 
not  both  of  them  taken  out  policies  of  insurance  on  the  same 
property  and  for  a  probable  aggregate  amount  in  excess  of 
their  actual  value. 

You  may  ask  why  we  speak  so  fully  of  the  conditions  that 
arise  from  the  use  of  the  words,  ''held  in  trust  or  on  commis- 
sion?" It  is  because  of  their  frequent  mis-use  informs  of  property 
description.  A  household  furniture  form  or  a  form  covering  the 
contents  of  a  hotel  or  a  church  or  a  school  or  any  other  public 
edifice  would  certainly  be  complicated  by  the  insertion  of  these 
words,  in  fact,  they  would  be  wholly  out  of  place  and  uncalled 
for  since  the  conditions  of  property  held  in  trust  or  on  com- 
mission should  never  occur  in  them.  To  the  carrier  the  ware- 
house-man and  the  commission  merchant,  the  attachment  of 
such  a  form  is  necessary  in  order  to  fully  protect  the  interests 
for  which  they  are  responsible,  unless  an  endless  number  of 
policies  are  issued  to  care  for  each  individual  owner  who  may 
have  goods  in  their  custody. 

Perhaps  you  may  say,  what  harm  can  these  words  in  a 
form  do  to  any  policy,  even  if  they  are  not  necessary  ?  Sometimes 
they  doubtless  would  create  no  injury,  but  at  others  their 
possibilities  as  a  trouble  maker  are  very  great.  They  are  words 
that  admit  of  other  interests  and  properties  being  covered, 
ones  that  the  nature  of  the  insured  risk  or  the  interests  of  its 
insurers  never  contemplated.  Do  not  use  it  then,  except  where 
proper  and  necessary. 

These  are  some  of  the  practices  and  expressions  in  forms 
of  property  description  that  if  wrongly  used  may  cause  dis- 
agreement and  perhaps  serious  trouble,  features,  that  in  form 
writing  should  be  used  most  guardedly  and  advisedly. 


In  describing  properties  for  purposes  of  insurance,  see  to 
it  that  you  describe  just  what  is  covered,  no  more  and  no  less 
and  that  you  do  it  in  the  fewest  words  that  are  needed  to  clearly 
define  it.  Don't,  for  example,  if  you  are  writing  a  form  on  the 
stock  of  a  hardware  store,  say  "carpenters'  tools,  saws,  planes, 
chisels  and  screw-drivers,"  for  all  these  last  are  carpenters' 
tools  and  the  multiplication  of  descriptive  words  leads  to  either 
careless  reading  of  the  form  or  to  the  suspicion  that  among  the 
great  number  of  words  used,  something  is  included  that  should 
not  be. 

Never,  oh,  never  allow  the  word  "etc."  to  creep  into  a 
policy  form!  Did  you  ever  stop  to  think  what  a  far  reaching 
term  "etc."  is?  If  not,  ask  some  adjuster  who  has  run  across  it 
in  the  form  on  a  policy  under  which  a  claim  has  been  made,  and 
get  him  to  tell  you  what  the  assured  thought  it  covered,  since 
his  idea  is  the  one  that  is  quite  apt  to  prevail. 

Location  of  Property. 

We  have  spoken  thus  far  of  forms  of  property  description 
and  have  sought  to  call  attention  to  some  of  the  things  that 
good  underwriters  must  avoid.  It  is  not  only  needful  to  have 
the  property  itself  described  properly,  but  its  location  calls 
for  just  as  clear  a  definition.  The  words  ''while  located  and 
contained  as  described  within  and  not  elsewhere''  that  appear 
in  many  policies  are  just  as  material  to  the  contract  as  is  the 
property  itself.  With  varying  locations  the  risk  quite  likely 
varies,  but  whether  it  does  or  not,  the  insurers  surely  have  the 
right  to  know  where  the  risk  is  that  they  are  assuming,  for  it 
may  be  necessary  for  them  to  decline  an  insurance,  because 
they  already  have  a  sufficient  commitment  in  that  particular  lo- 
cality, also  because  outside  conditions  may  make  one  locality 
undesirable,  while  the  same  class  of  property  owned  by  the  same 
assured  in  another  locality,  would  be  perfectly  acceptable. 

It  has  been  held  that  where  the  policy  says,  'Hhe  following 
described  property,  contained  in  a  certain  building,''  further 
definition  of  the  location  is  not  necessary  or  material  to  the 
contract,  if  the  nature  of  the  property  makes  it  clear  that  it 
must  have  been  the  intention  of  the  insurer  and  insured  to  pro- 
tect it  by  the  poHcy  whether  in  that  particular  place  or  not. 
In  that  case,  a  designation  of  the  location  is  looked  upon  as  being 
merely  descriptive  and  to  be  controlled  by  the  necessary  use 
of  the  thing  insured.  Conditions  are  very  unusual  however, 
where  clearly  defining  the  location  of  the  insured  property  is 
not  fully  as  material  to  the  contract  as  the  description  of  the 
property  itself.  In  the  New  York  form  of  policy  the  words 
"and  not  elsewhere"  are  added  to  those  describing  the  location. 
These  words  are  a  sort  of  warranty  as  to  the  location,  and  their 
use  certainly  seems  desirable  even  though  in  the  Massachusetts 
Standard  form  of  policy  they  do  not  appear. 


89 

The  use  of  the  word  ''premises''  sometimes  leads  to  mis- 
understandings in  the  interpretation  of  a  form.  Just  what 
are  "premises"?  The  interpretation  of  this  word  in  the  fire 
poHcy  seems  to  vary  somewhat  in  different  courts,  and  unless 
the  extent  of  the  so-called  "premises"  is  in  some  way  defined 
or  restricted,  in  the  policy  form,  it  appears  to  be  so  indefinite 
as  to  have,  in  some  cases,  been  interpreted  as  covering  in  locali- 
ties more  or  less  remote  from  one  another,  but  all  forming  a 
part  of  some  one  plant.  To  define  just  what  "premises"  •  are  is 
a  puzzling  proposition,  so  only  use  it  with  proper  Hmi  tat  ions 
or  full  and  clear  understanding  both  on  the  part  of  the  insurer 
and  of  the  insured. 

Probably  ro  words  that  are  commonly  used  in  forms  of 
property  location  have  caused  so  much  trouble  as  ''additions 
and  alterations''  and  "adjoining  and  communicating."  They 
may  seem  clear  enough,  but  it  is  a  fact  that  our  Courts  have 
seen  fit  to  regard  them  as  being  sufficiently  elastic  in  their 
interpretation  to  admit  of  entirely  unlooked  for  meanings. 
The  words  "additions  adjoining  and  communicating"  in  a 
manufacturing  plant  have  been  held  to  cover  all  buildings 
which  are  either  added  to  the  main  building,  and  that  may 
be  in  any  way  necessary  for  the  complete  operation  of  that  plant. 
"Adjoining  and  communicating"  is  not  always  held,  by  any 
means,  to  require  that  the  buildings  under  consideration  neces- 
sarily touch  each  other.  In  fact,  the  words  "adjoining  and 
communicating,"  when  made  use  of  in  describing  the  buildings 
of  a  manufacturing  plant  have  been  held  to  cover  any  building 
that  is  essential  to  the  conduct  and  operation  of  the  business, 
even  when  quite  remote. 

Usually  we  think  of  the  words  "adjoining  and  communi- 
cating or  connecting"  as  meaning  that  the  buildings  referred 
to  are  actually  built  into  or  attached  to  one  another.  One  of 
our  New  England  Courts  held  that  a  certain  dry-house  at  quite 
a  distance  from  the  main  plant,  but  connected  to  it  by  a  steam 
pipe,  constituted  such  a  communication  as  was  contemplated 
in  the  poHcy  and  the  insurance  companies  were  compelled  to 
pay  a  loss  on  this  dry-house,  which  they  had, clearly  understood 
was  not  in  any  sense  covered  by  their  policy  and  not  included 
in  the  rate.  In  fact,  it  was  separately  and  much  more  highly 
rated. 

It  is  difficult  to  give  a  general  line  of  guidance  or  instruc- 
tion in  the  use  of  these  words,  and  the  most  that  we  can  say 
is  that  before  you  use  them,  stop  and  think  as  to  what  the 
broadest  interpretation  that  might  be  given  them  along  the  lines 
which  we'  have  cited,  would  cause  the  Company  to  be  called 
on  to  contribute  for.  If  in  a  general  form  covering  different 
buildings,   this  phrase  is  used  for  the  sake  of  convenience  to 


90 

make  it  more  comprehensive,  while  it  is  intended  not  to  cover 
certain  particular  buildings,  the  exception  of  those  particular 
buildings  should  be  distinctly  noted. 

In  defining  locations  probably  the  simplest  policy  forms 
and  the  ones  most  frequently  written,  namely  those  applying 
to  dwellings,  present  more  instances  of  carelessness  than  any 
other  class.  "East  side  of  Main  street  in  the  town  of  So  and 
So,"  is  surely  an  indefinite  description  of  a  location  when  Main 
street  may  be  several  miles  long  and  in  the  event  of  a  certain 
party  owning  several  dwellings  on  the  East  side  of  the  street, 
there  is  nothing  to  hinder  a  single  policy  paying  tribute  in  the 
event  of  loss,  for  any  one  of  these  dwellings.  Descriptions  of 
this  sort  are  by  no  means  rare,  but  are  not  the  less  reprehensible. 

Another  phrase  that  is  commonly  used  in  forms  of  property 
location,  presents  a  feature  of  carelessness  that  makes  one 
wonder  that  it  is  not  taken  exception  to  more  frequently  by  the 
underwriter.  I  refer  to  the  use  of  the  words  ''all  while  contained 
in.''  You  know  how  many  forms  that  have  described  mer- 
chandise, or  building  contents  of  some  sort  or  other,  end  with 
the  words,  "all  while  contained  in,"  and  then  proceed  to  describe 
the  enclosing  building  and  its  location.  I  think  you  will  agree 
that  this  does  not  really  limit  the  liability  of  the  Company 
to  the  merchandise  or  other  property  covered  while  in  that 
particular  place.  To  be  thoroughly  safeguarded,  it  should 
read,  ''only  while  contained  therein  and  not  elsewhere.'' 

Improvements  and  Betterments. 

Before  closing  these  comments  on  forms  of  property  descrip- 
tion and  location,  I  again  want  to  urge  upon  you,  the  need  that 
there  is  for  your  always  regarding  forms  or  permits  or  clauses 
as  being  something  that  modifies  the  standard  policy  contract 
and  in  order  to  make  it  conform  to  some  especial  usage  of  trade 
or  to  grant  certain  privileges  that  are  essential  to  the  needs 
of  some  particular  ownership.  Do  not  regard  the  whole  policy 
as  being  represented  by  the  provisions  embodied  in  the  forms 
or  clauses  attached,  but  remember  that  these  additions  are 
supplementary  to  the  policy  contract  itself,  and  while  their 
provisions  must  supercede  those  of  the  body  of  the  policy, 
yet  they  are  dependent  upon  same  and  they  must  never  be  con- 
sidered irrespective  of  the  standard  provisions  in  the  policy, 
itself. 

Avoid  Unnecessary  Charges. 

Where  forms  have  been  well  tried  out  and  have  been  found 
to  work  no  injustice  to  either  insurer  or  insured,  but  which 
clearly  define  just  what  the  nature  of  a  certain  risk  is  and  just 
where  it  is  located,  do  not  seek  to  continually  change  the  form 
other  than  as  it  may  be  necessary  to  describe  the  actual  property 


91 

insured  and  the  place  in  which  it  is  insured.  In  the  general 
use  of  the  various  phrases  that  are  so  often  in  dispute,  some  of 
which  I  have  spoken  to  you  about,  stick  closely  to  the  old  pre- 
scribed forms  and  don't  get  the  idea  that  you  are  doing  a  brilliant 
act  if  you  invent  some  new  form  that  may  or  may  not  prove 
acceptable.  Rejnember,  when  you  are  inclined  to  find  fault 
with  a  form  that  has  been  in  use  a  long  time  and  has  in  the  main 
proved  equitable,  that  ''His  better  to  endure  an  ill  than  fly  to 
evils  that  we  know  not  of !" 


Standard  Policy— Clauses  and  Forms 
Tkird  Pat)er 

BY 

WILLIAM  B.  MEDLICOTT 
Forms  for  otner  tnan  Direct  Fire  Loss 

In  our  last  lecture  we  confined  our  attention  to  fire  insurance 
forms  of  property  description  and  location.  You  will  also  recall 
that  in  beginning  this  course  of  talks,  we  defined  forms  as  those 
attachments  to  the  policy  which  were  descriptive  in  their  nature, 
and  we  mentioned  the  fact  that  forms  not  only  described  the 
property  covered  and  the  place  in  which  it  was  located,  but 
they  might  also  define  the  nature  of  the  insurance  carried  in 
the  event  of  its  being  other  than  against  direct  loss  or  damage 
from  fire. 

Use  and  Occupancy,  Rent,  Leasehold  Interest, 
AND  Profits  Insurance. 

We  define  attachments  of  this  sort  as  being  "forms  for 
other  than  fire  liability,"  such  as  use  and  occupancy,  rent, 
lease-hold  interest,  profit  insurance,  etc.  It  is  my  purpose 
to-night,  to  bring  forms  for  insurance  contracts  of  this  type 
to  your  attention  and  the  subject  is  one  that  I  approach  with 
hesitancy.  I  recall  some  15  years  ago  at  an  insurance  banquet, 
that  an  address  was  given  by  one  of  the  oldest  and  most  exper- 
ienced fire  insurance  company  presidents  then  in  active  business. 
In  the  course  of  his  address  he  stated  that  he  had  been  recently 
asked  as  to  who  understood  use  and  occupancy  insurance.  His 
reply  was  that  he  believed  that  a  few  special  agents  knew  some- 
thing about  it,  but  not  a  single  head  office  official!  I  am  fully 
justified  in  believing  that  at  that  time  I  was  not  one  of  the  few 
special  agents  referred  to,  and  with  the  increasing  complications 
and  perplexities  that  insurance  contracts  of  this  sort  present, 
I  begin  to  wonder  whether  I  do  not,  after  all,  really  know  less 
about  insurance  of  this  class  now  than  I  believed  I  did  then. 
So  you  can  see  that  insurance  of  these  varied  forms,  presenting 
as  it  does,  problems  vastly  different  from  those  embodied  in 
the  direct  fire  loss  contract,  and  also  considering  that  up  to 
date,  the  experience  of  the  companies  writing  this  class  of  instir- 


93 

ance  is  a  somewhat  limited  one,  naturally  causes  statements 
made  in  regard  to  it,  to  be  uttered  with  more  or  less  hesitation. 
We  have,  however,  gone  far  enough  with  it  to  know  that 
there  are  certain  conditions  that  must  be  carefully  avoided 
and  it  is  my  hope  that  in  this  discussion  tonight  your  attention 
may  be  called  to  them,  and  that,  if  we  accomplish  nothing  more, 
you  will  be  brought  into  an  attitude  of  mind  that  will  cause 
you  to  think  carefully  of  these  varied  forms  of  insurance  when- 
ever you  have  occasion  to  study,  devise  or  pass  upon  them,  and 
will  be  able  at  least  to  avoid  some  of  the  common  errors  that 
so  easily  creep  in. 

Use  and  Occupancy  Insurance. 

The  most  common  of  the  forms  we  have  mentioned  is  that 
of  "Use  and  Occupancy."  Now,  what  is  use  and  occupancy 
insurance?  Just  what  does  this  title,  "Use  and  Occupancy," 
really  mean?  Many  circulars  have  been  issued  defining  it,  and 
while  in  the  main  they  agree,  still  a  recent  experience  of  my 
own  with  parties  taking  out  contracts  of  this  character  and  who 
had  sought  advice  through  various  sources,  revealed  the  fact 
that  it  is  very  easy  for  the  insurance  man,  in  seeking  to  define 
and  explain  just  what  a  use  and  occupancy  contract  covers, 
to  unintentionally  mislead  his  customer. 

The  natural  tendency  with  any  man  in  explaining  a  some- . 
what  complicated  contract  of  this  sort,  is  to  magnify  its  efficiency 
and  with  thoroughly  good  intentions,   and  usually  with  great 
largeness   of   heart,   to   make   it   appear  to   cover  many  things 
that  the  underwriter  never  contemplated  insuring  against. 

Let  us,  from  the  combined  wisdom  of  those  who  have  written 
on  this  subject,  and  the  experience  of  others,  try  and  give  a 
condensed  statement  of  the  province  of  use  and  occupancy 
insurance.  Some  state  that  its  object  is  to  make  good  the  loss 
of  "profits"  that  are  consequent  upon  the  shutting  down  of  a 
manufacturing  plant  by  fire.  Others  state  that  while  it  is  not 
primarily  designed  to  insure  profits  as  such,  it  is  to  insure  the 
results  of  production  in  the  sense  that  product  is  regarded  as 
income  from  process  of  operation. 

In  the  event  of  a  shut-down  as  the  result  of  a  fire,  this  pro- 
duct and  income  largely  if  not  entirely  ceases,  while,  at  the 
same  time,  there  are  always  certain  fixed  charges  and  expendi- 
tures which  have  to  be  kept  up  in  order  to  maintain  the  organ- 
ization in  such  a  condition  as  to  not  only  hurry  forward  the 
needful  repairs  and  re-instatement  of  the  damaged  plant,  but 
also  to  place  the  same  on  an  operating  basis  as  soon  after  its 
completion  as  possible.  For  illustration,  interest  on  indebted- 
ness that  the  concern  may  have  outstanding,  continues  to 
work  whether  the  plant  runs  or  not,  taxes  are  seldom  materially 
abated  as  a  consequence  of  a  fire ;   royalties  for  special  machinery 


94 

usually  continue  in  force;  salaries  of  those  who  are  under  term 
contracts  with  the  concern;  the  wages  of  watchmen,  firemen, 
engineers,  costs  of  lighting  and  heating,  and,  in  fact,  you  can 
readily  think  of  numerous  other  fixed  charges,  which  if  it  is 
the  purpose  of  the  assured  to  restore  his  plant  and  continue 
in  business  as  promptly  as  possible,  must  be  continued  in  order 
to  enable  him  to  resume  a  condition  of  satisfactory  productive- 
ness at  as  early  a  day  as  possible.  Meantime,  through  the 
intervention  of  fire,  the  income  —  the  funds  coming  in  from 
the  business  that  are  looked  to  to  care  for  these  fixed  charges  — 
has  ceased. 

It  seems  to  me  then,  that  those  who  define  use  and  occu- 
pancy insurance  as  covering  profits  even  in  the  remote  sense 
that  some  writers  use  the  term,  rather  misuse  the  term  and 
are  likely  to  mislead.  It  is  a  continuance  of  product,  it  seems 
to  me,  that  use  and  occupancy  insurance  guarantees,  in  the 
sense  that  when  a  plant  is  producing  goods  or  when  business 
activities  of  any  kind  are  being  conducted  within  its  confines, 
whether  manufacturing  or  not,  there  is  a  result  obtained  that 
brings  in  through  the  disposition  of  that  product,  of  an  income 
to  meet  the  expenditures  connected  with  manufacturing  whether 
they  result  in  a  profit  or  not.  Do  not  think  from  this  that  I 
would  consider  a  plant  that  was  running  without  making  a 
profit  as  a  desirable  subject  for  a  use  and  occupancy  policy 
but  even  assuming  that  it  was  operating  on  a  highly  profitable 
basis,  the  use  and  occupancy  contract  should  not  be  construed 
to  make  good  the  loss  of  that  profit  which  would  result  from 
a  fire  and  a  termination  of  the  processes  of  manufacture  or 
trading  and  the  consequent  gain  resulting  from  them. 

There  are  many  losses  that  result  from  the  shut-down  of 
a  plant  or  store  during  its  periods  of  activity,  aside  from  those 
we  have  spoken  of  and  the  money  derived  "from  the  insurance 
carried  under  the  use  and  occupancy  form  has  been  found  again 
and  again  to  be  the  only  available  fund  which  could  be  used 
to  lessen  the  period  of  inactivity  or  to  carry  on  the  business 
temporarily  while  the  rehabilitation  of  the  destroyed  plant 
was  being  carried  on.  This  latter  view  of  the  situation  is  tenable, 
when  we  consider  that  under  a  use  and  occupancy  policy,  the 
sum  of  money  paid  over  to  the  assured  has  oftimes  enabled 
him  to  either  engage  temporary  quarters  or  to  lease  some  other 
plant  and  in  that  way  to  continue  to  supply  his  customers 
and  hold  his  business,  during  the  same  period  that  his  fire  policies 
are  re-building,  re-equipping  and  re-stocking  the  destroyed 
plant. 

One  of  the  first  questions  that  presents  itself  to  the  under- 
writer, and  one  that  should  be  carefully  considered  by  the  assured 
as  well,  is  as  to  who  are  wisely  eligible  for  policies  of  this  sort 
and  for  what  amount  may  they  be  written.  As  a  general  prin- 
ciple,   it   may   be   stated   that   only   concerns   of   unquestioned 


95 

standing  and  accounting  methods  should  ever  be  considered 
in  writing  insurance  of  this  sort.  Some  companies  go  even 
farther  than  this,  and  in  order  to  render  the  Hkehhood  of  a  total 
loss  under  a  use  and  occupancy  policy  as  remote  a  thing  as 
possible,  confine  their  writings  strictly  to  sprinklered  risks. 
This  latter  point  is,  of  course,  wholly  discretionary  with  the 
underwriting  company,  but  the  first  feature  mentioned,  that 
of  high  standing  and  efficient  bookkeeping,  should  be  always 
required  of  those  seeking  insurance  of  this  character. 

I  do  not  know  that  there  is  any  rule  adhered  to  by  the  insur- 
ance companies  as  to  the  proper  amount  of  a  use  and  occupancy 
policy  with  reference  to  either  value  of  the  property  or  the 
amount  of  business  transacted  by  the  assured.  Some  have 
adopted  a  form  calling  for  90%  of  the  net  income;  this  would 
appear  to  introduce  the  profit  feature,  and,  in  any  event,  to 
raise  a  doubt  as  to  just  what  "net"  income  was.  As  a  general 
proposition  I  believe  that  about  10%  of  the  annual  business 
of  a  concern  is  a  reasonably  fair  average  line  of  use  and  occupancy 
to  carry,  and  experience  would  seem  to  bear  out  this,  since  the 
average  amounts  carried  run  not  far  from  this  percentage. 
Let  us  take  the  case  of  a  certain  concern  that  comes  to  my  mind 
at  this  moment;  its  plant  is  valued  at  about  $400,000.  They 
are  carrying  fire  policies  to  the  extent  of  90%  of  that  value. 
The  annual  business  averages  a  million  a  year.  After  careful 
consideration,  both  underwriter  and  assured  agreed  that  $100,- 
000  use  and  occupancy  was  just  about  the  right  amount  to  carry. 

Conditions  of  construction,  the  nature  of  the  business,  the 
frequency  with  which  the  stock  is  turned,  the  protective  devices 
in  use  on  the  property,  all  have  their  bearing  on  both  the  desir- 
ability and  the  amount  of  the  use  and  occupancy  policy,  and 
the  rate  at  which  it  should  be  written,  and  as  experience  grows 
riper,  on  dealing  with  contracts  of  this  sort,  doubtless  more 
definite  rules  will  be  formulated  for  the  guidance  of  the  agent 
and  the  broker  seeking  use  and  occupancy  contracts,  but  at 
present,  we  are  largely  feeling  our  way  in  the  dark,  though  ex- 
perience has  proved  that  the  enterprise  thus  far,  not  only  has 
been  a  reasonably  profitable  one,  but  also  promises  well  for 
the  future. 

Cases  often  arise  in  manufacturing  plants  where  a  use  and 
occupancy  contract  may  rightfully  be  drafted  to  cover  other 
than  the  manufacturing  or  producing  buildings.  Storehouses 
that  contain  the  product  either  in  an  incomplete  or  a  finished 
state,  may  properly  be  covered  since  their  destruction  or  the 
loss  or  injury  of  their  contents  will  just  as  effectively  shut  off 
the  output  of  the  mills  as  a  fire  in  the  producing  portions.  A 
lumber  yard  directly  connected  with  a  plant  using  wood  as 
one  of  its  raw  materials  may  rightfully  be  included,  in  the  same 
way  that  a  storehouse  might. 


96 

In  the  case  of  a  mercantile  business,  the  store  where  the 
actual  business  of  distributing  is  conducted  or  the  storehouses 
on  which  such  store  depends  for  its  immediate  needs  are  also 
fit  subjects. 

As  to  the  question  of  rate,  at  present,  as  you  know,  fixed 
tariff  rates  are  not  universally  promulgated  on  insurance  of 
this  class.  They  are  purely  discretionary  with  the  underwriters. 
Investigation  reveals  that  they  run  one-half  to  three-quarters 
of  the  regular  fire  rate.  In  occasional  cases,  they  fully  equal 
the  latter,  but  we  probably  are  not  far  out  when  we  say  that 
the  great  bulk  of  use  and  occupancy  insurance  written  today, 
here  in  the  east  is  written  at  about  two-thirds  of  the  fire 
rate.  Whatever  the  rate  is,  it  must  be  modified  largely  by 
the  conditions  that  exist  in  the  plant,  not  only  as  to  the  likeli- 
hood of  a  loss,  but  the  ability  to  confine  that  loss  within  small 
limits  and  also  such  arrangements  in  the  plant  as  make  it  probable 
that  a  fire  will  result  in  but  a  temporary  shut-down  at  the  most. 

Use  and  occupancy  policies  are  written  not  only  with  a 
limitation  as  to  the  maximum  amount  payable  thereunder, 
but  with  a  stipulated  per  diem  contribution  which  shall  con- 
tinue during  the  period  of  shut-down  in  the  event  of  a  loss 
occurring.  This  feature  of  the  use  and  occupancy  contract 
is  the  one  that  probably  has  created  more  discussion  between 
insurer  and  insured  than  any  other  in  connection  with  this 
class  of  insurance.  For  example,  suppose  a  man  takes  out  a 
use  and  occupancy  poHcy,  of  $3,000  on  his  factory.  We  always 
assume  that  there  are  300  working  days  in  a  year  and  that, 
therefore,  $10  a  day  for  each  working  day  would  exhaust  the 
policy  in  question.  But  the  assured  will  say,  "at  the  mo^t, 
I  can't  be  shut-down  over  4  months.  Why  then  shouldn't 
I  get  instead  of  $10  or  that  is  one  three-hundredths  of  my  policy 
per  day,  one  one-hundredths  since  there  are  about  100  working 
days  in  4  months.  In  other  words,  why  shouldn't  my  con- 
tract give  me  $30  instead  of  $10  a  day  during  the  period  I  am 
shut  down?"  A  contract  drawn  in  this  way  and  granting  this 
more  liberal  per  diem  contribution,  would  certainly  be  a  valid 
one  if  an  insurance  company  saw  fit  to  grant  it  but  it  would  be 
unjust  to  ask  any  company  unless  they  were  to  receive  a  very  ^ 
materially  higher  rate,  to  accept  such  a  contract  for  a  year. 
Suppose  the  assured  chose,  in  the  illustration  used  to  take 
out  his  poHcy  for  4  months  and  paid  a  rate  accordingly,  because 
he  would  probably  say:  'T  can  have  my  plant  going  again  under 
any  conditions,  in  that  period  and  I  don't  need  a  use  and  occu- 
pancy policy  for  a  longer  term  than  that."  Such  an  arrangement, 
if  a  company  saw  fit  to  grant  it,  would  be  all  right,  but  they 
certainly  should  be  paid  a  very  materially  higher  rate.  You 
will  all  admit,  I  am  sure,  that  to  take  such  a  contract  for  a  vear 


97 

with  the  likeHhood  that  cessation  for  a  small  part  of  that  year 
might  completely  exhaust  the  policy,  is  an  underwriting  propo- 
sition that  cannot  commend  itself  to  any  careful  insurer. 

Other  features  must  be  considered  in  discussing  use  and 
occupancy  insurance,  and  these  are  especially  provided  for  in 
many  of  the  use  and  occupancy  forms  by  stating  the  method 
that  shall  be  adopted  in  determining  the  actual  effect  on  the 
business  owing  to  a  cessation  of  working  power.  A  good  illus- 
tration of  this  is  the  case  of  use  and  occupancy  insurance  that 
is  written  on  street  railway  properties  where  the  income  varies 
very  materially  between  the  summer  and  winter  months.  In 
properties  of  this  sort,  it  is  customary  when  taking  out  use 
and  occupancy  insurance  to  specify  in  the  form  that  as  a  basis 
for  the  computation  of  daily  income,  there  shall  be  taken  that 
of  the  corresponding  period  of  the  previous  year.  Suppose 
that  owing  to  a  fire  in  its  power  plant,  for  example,  a  certain 
street  railway  was  unable  to  operate  its  cars  during  the  entire 
month  of  July,  July  averaging  probably  as  one  of  the  heaviest 
months  in  the  annual  business  of  the  road.  Now,  it  would  not 
be  fair  to  take  the  average  monthly  business  for  the  entire  year 
as  being  the  loss  sustained,  and,  therefore,  a  form  such  as  the 
one  we  are  speaking  of  would  require  the  determination  (which 
could  be  readily  shown  from  the  books  of  the  assured)  of  the 
business  of  the  preceding  July,  which  would  be  taken  as  a  basis 
for  the  amount  and  damage  to  its  business  sustained  by  the  road 
and  would  furnish  data  from  which  to  figure  out  the  contribu- 
tion by  the  use  and  occupancy  policies.  . 

Some  use  and  occupancy  forms,  in  addition  to  the  provi- 
sion just  described,  insert  one  stating  that  increased  or  decreased 
daily  or  monthly  production,  owing  to  growing  or  a  falling  off 
business  condition,  may  also  be  considered  in  arriving  at  the 
actual  loss  of  output. 

Some  lines  of  business,  owing  to  trade  or  climatic  conditions 
shut-down  entirely  for  certain  months  in  the  year  and  the  same 
treatment  is  necessary  to  equitably  adjust  their  loss  that  is 
used  in  the  street  railway  illustration  we  have  cited. 

The  general  experience  of  companies  writing  use  and  occu- 
pancy insurance  indicates  that  it  can  safely  be  written  at  figures 
related  to  the  fire  rates  in  the  proportion  we  have  mentioned. 
This,  however,  we  must  confess,  is  still  very  largely  a  matter  of 
conjecture,  since  loss  costs  and  averages  are  very  difficult  of 
determination  in  insurance  of  this  class  and  have  not  as  yet 
been  derived  from  a  sufficiently  wide  experience  to  really  make 
them  of  established  value.  I  want  to  emphasize  again  the  great 
importance  of  careful  consideration  of  the  individual  premises 
and  the  financial  condition  and  accounting  methods  of  its  owner 
that  is  insured  under  any  use  and  occupancy  policy.  Is  the  plant 
one  that  uses  standard  machinery  and  appliances  that  are  readily 
obtainable,  or  is  it  one  that  is  wholly  dependent  on  the  output 


98 

of  patented  devices  that  are  slow  of  construction  and  that  are 
only  built  when  definitely  required?  Conditions  like  these 
make  all  the  difference  between  a  short  shut-down  and  rapid 
re-placement  or  a  long  and  tedious  wait.  The  same  conditions 
apply  to  the  building  to  be  replaced.  Is  it  a  frame  structure 
that  can  quickly  be  rebuilt,  and  that  has  not  special  features 
in  its  arrangement  or  is  it  a  brewery,  for  example,  that  necessi- 
tates slow  building  methods  and  special  arrangements  adapted 
to  its  processes?  Are  the  assured's  books  well  and  clearly  kept, 
and  can  products  and  income  be  readily  and  accurately  de- 
termined? 

In  an  industry  that  is  dependent  upon  large  power  for  its 
operation,  is  the  power  plant  so  built  and  arranged  that  it  could  be 
easily  crippled  and  shut  down  the  entire  premises?  Still  further, 
is  the  nature  of  the  power  used  and  the  way  it  is  used,  such  that 
it  would  be  easy  or  difficult  to  install  and  connect  temporary 
engines  or  motors  in  order  to  get  the  plant  under  way?  All 
such  points  must  be  taken  into  account  by  the  careful  under- 
writer in  considering  not  only  the  desirabiHty  of  use  and  occu- 
pancy insurance,  but  the  rate  at  which  it  may  be  written.  In 
this  connection  let  us  say  that  it  is  to  be  hoped  that  the  time 
is  not  far  distant  when  there  will  be  more  data  on  file  that  will 
show  the  actual  results.  At  present  rates,  insurance  of  this 
class  appears  to  be  fairly  profitable,  both  as  to  the  ratio  which 
the  losses  bear  to  the  premiums  received,  and  that  more  impor- 
tant item,  loss  cost,  which  is  the  ratio  of  the  loss  sustained  to 
the  total  amount  insured. 

Before  giving  illustrations  of  some,  of  the  forms  of  use  and 
occupancy  insurance  that  are  desirable  and  some  that  are  bad, 
I  want  to  take  up  briefly  those  other  classes  that  are,  in  a  cer- 
tain way  insurance  of  the -same  sort,  such  as  rent,  leasehold 
interest,  and  profit.  It  seems  better  to  speak  of  these  before 
passing  on  to  use  and  occupancy  forms,  since  there  is  a  tendency, 
as  already  stated,  in  the  minds  of  many  to  mix  the  functions 
of  use  and  occupancy  insurance  with  one  or  more  of  these  other 
classes,  according  to  the  nature  of  the  risk  insured. 

Rent  Insurance. 

This  class  of  insurance,  although  of  rather  recent  origin, 
has  grown  to  considerable  magnitude  and  is  being  regarded 
with  more  and  more  favor,  both  by  the  insurance  companies 
and  their  patrons.  When  it  is  properly  written,  it  proves  both 
equitable  and  fairly  remunerative.  The  reasons  for  this  are 
that  properties  that  are  considered  fit  subjects  for  insurance 
of  this  character  and  to  which  its  operations  have  thus  far  been 
confined,  are  almost  invariably  under  both  police  and  fire  depart- 
ment protection,  and,  what  is  more  important,  property  that 
is  eligible  for  rent  insurance,  represents  a  greater  freedom  from 


99 

moral  hazard.  The  reason  for  this  is  that  rented  properties 
are  usually  under  the  control  as  well  as  the  occupancy  of  tenants 
and  are  not  freely  accessible  to  those  who  might  directly  benefit 
by  a  fire.  Again,  the  measure  of  damage  resulting  from  a  loss 
under  a  contract  of  this  character  is  very  easily  ascertained 
and  owing  to  this,  a  better  salvage  is  often  secured  than  results 
from  a  loss  on  either  buildings  or  on  other  property. 

There  are  many  forms  under  which  rent  insurance  is  written, 
forms  of  varying  length,  some  clear,  some  ambiguous  and  the 
tendency  appears  to  be  on  the  part  of  some  brokers  specializing 
on  insurance  of  this  sort,  to  continually  broaden  the  contract 
in  order  to  make  it  more  attractive  and  thereby  secure .  the 
placing  of  more  insurance  of  this  character  for  themselves. 
Both  experience  and  litigation  have  had  a  good  effect  on  the 
drafting  of  rent  insurance  forms.  Whatever  form  is  used, 
the  same  obligation  that  we  spoke  of  under  forms  of  property 
description  should  always  be  kept  in  mind.  The  intent  of  the 
parties  should  be  clear  and  it  should  be  defined  beyond  a  doubt 
that  the  policy  is  to  cover  on  the  rents  derived  from  the  building 
at  the  time  of  the  fire.  To  insure  this  requires  co-insurance 
to  the  extent  of  the  actual  rental,  but  it  should  not  in  my  opinion 
cover  the  income  that  might  be  derived  from  properties  unrented 
at  the  time  of  the  fire.  We  call  your  attention  especially  to 
this  because  there  is  a  growing  tendency  on  the  part  of  some  form 
drafters  to  make  a  rent  form  cover  not  only  the  actual  rents 
that  are  lost  by  the  fire,  but  to  use  without  restriction  the  phrase 
"rental  value,"  basing  the  income  thereby  on  the  total  rent 
that  would  be  obtained  were  the  entire  property  rented.  You 
can  readily  see  that  with  such  a  form,  old,  undesirable  and  un- 
popular buildings  might  receive,  through  rent  insurance,  a  far 
greater  sum  than  the  actual  loss  of  rents  which  the  owners 
had  sustained  from  a  fire. 

A  form  that  it  seems  to  me  covers  all  that  a  rent  form 
should,  might  be  worded  as  follows: 

"It  is  understood  and  agreed  that  in  case  above  named  building 
or  any  part  thereof,  shall  be  rendered  untenantable  by  fire,  this  Company 
shall  be  liable  to  the  Assured  for  the  actual  loss  of  Rents  ensuing  there- 
from, based  on  the  rentals  in  force  from  the  rented  portion  of  the  premises 
at  the  time  of  the  fire  and  not  exceeding  the  sum  insured. 

"Loss  to  be  computed  from  the  day  of  the  fire  for  the  time  it  would 
require  to  put  the  premises  in  tenantable  condition,  and  not  to  be  limited 
by  the  expiration  of  the  policy,  excluding  from  such  time,  such  portion 
thereof  as  may  be  consumed  by  a  strike  or  by  any  other  delay  beyond 
the'  control  of  the  Insured. 

"In  consideration  of  the  reduced  rate  at  which  this  policy  is  issued 
the  Insured  stipulates  and  agrees  to  carry  insurance  on  said  rents  to 
an  amount  equal  to  the  actual  rents  of  said  premises,  and  it  is  under- 
stood and  agreed  that  if  at  the  time  of  the  fire,  the  aggregate  insurance 
upon  said  Rents  shall  be  less  than  the  actual  rentals  at  the  time  of  the 
fire,  the  Insurance  shall  be  held  to  be  an  Insurer  in  the  amount  of  such 
deficiency,  and  in  that  event  shall"  bear  such  proportionate  share  of 
the  loss." 


100 

You  will  note  from  this  that  while  the  object  of  rent  insur- 
ance is  to  indemnify  a  landlord  for  the  loss  of  income  that  would 
come  to  him  through  a  fire,  and  is  in  a  general  way  insurance 
of  the  same  class  as  use  and  occupancy,  still  there  is  a  wide 
difference  in  that  the  rents  lost  are  definitely  ascertainable, 
while  with  the  use  and  occupancy  there  is  always  an  element 
of  uncertainty  as  to  just  the  extent  of  the  damage  and  the  neces- 
sary contribution  therefor  on  the  part  of  the  insurance  companies. 

You  will  furthermore  note  that  while  rent  insurance,  if 
properly  written,  should  always  be  accompanied  by  a  clause 
fixing  the  amount  of  insurance  to  be  carried  with  respect  to 
total  income  or  business,  a  use  and  occupancy  policy  could 
not  properly  be  subject  to  such  a  restriction. 

Leasehold  Interest  Insurance. 

Insurance  of  this  character  covers  more  varied  interests 
than  are  involved  in  rent  insurance.  It  necessarily,  therefore, 
becomes  more  complicated.  Leasehold  interest  insurance  not 
only  insures  the  middleman  or  lessee,  but  it  also  insures  the 
profit  between  what  he  would  pay  the  owner  of  the  property 
and  what  he  may  receive  from  tenants  to  whom  he  sub-lets 
the  same.  Again,  it  may  insure  his  interest  as  lessee,  and  yet 
again,  it  may  insure  his  interest  in  a  building  which  he  may  erect 
on  leased  ground.  The  fact  that  such  a  variety  of  interests 
may  be  brought  forward  under  a  leasehold  interest  policy, 
necessarily  raises  many  features,  and  some  of  the  objectionable 
ones  are  the  following: 

Contracts  often  exist  between  the  landlord,  that  is  the  real 
owner  of  the  property,  and  the  lessee  which  are  not  divulged  by 
the  policy  and  the  provisions  of  which  the  insurer  and  even  the 
broker,  placing  the  line,  may  be  in  absolute  ignorance  of.  This 
difficulty  might  be  overcome  by  the  use  of  a  proper  form,  but 
it  is  a  fact  that  it  has  frequently  been  the  subject  of  tedious 
and  more  or  less  expensive  litigation.  Many  leasehold  forms 
for  attachment  to  insurance  policies,  contain  a  clause  like  this: 

"It  is  a  condition  of  this  insurance  that  this  Company  is  Hable 
only  in  case  of  such  destruction  by  fire,  of  the  above  named  premises, 
that  the  lease  held  by  the  Insured  shall,  by  its  terms  be  cancelled.  The 
Company  then  shall  be  liable  to  pay  the  amount  hereby  insured." 

This  you  will  note,  refers  to  a  contract  that  is  not  set  out  in 

the  policy  which  at  times  presents  objectionable  and  dangerous 

features  for  the  insurance  company. 

In  some  cases  the'  following  phrase  is  used : 

"In  case  of  the  destruction  of  the  premises  by  fire,  this  lease  shall 

cease  and  be  terminated." 

Under  this  clause  if  the  term  of  the  lease  would  not  expire  for 
say,  3  years  and  the  building  should  be  replaced  in  tenantable 
condition  in  4  months,  the  lessee  could  collect  from  the  insurance 
company  for  3  years  rent,  if  he  had  insurance  amounting  to  as 


101      \   \'./.  ;  \^:        ;'^./ 

much  as  that,  wholly  regardless  of.the/time:tiSai'ft  actually  takes 
to  replace  the  damaged  property.  ^'I'hg  'Courts' "^are^^ ha* vitig '^con- 
tinually presented  to  them  for  adjudication,  features  that 
were  never  contemplated  by  either  party  to  the  contract  before 
the  fire,  but  which  have  been  raised  at  the  instigation  of  some 
attorney  brought  into  the  settlement  of  the  loss  claim.  It  is 
difficult  to  draft  a  leasehold  form  which  will  cover  all  cases, 
and  the  only  wise  suggestion  that  can  be  made  is  that  forms 
used  in  leasehold  interest  insurance  should  be  prepared  with 
great  care  and  should  always  be  regarded  from  the  standpoint 
of  an  occurred  loss  thereunder. 

Another  and  most  important  feature  of  leasehold  interest, 
and  one  that  calls  for  the  closest  of  scrutiny  on  the  part  of  the 
underwriter,  is  that  insurance  of  this  character  is  very  easily 
and  not  infrequently  tainted  with  moral  hazard,  especially  if 
the  lessee  desires  to  rid  himself  of  a  bad  bargain.  The  possi- 
bilities of  making  money  fraudulently  out  of  an  opportune  fire 
under  a  policy  of  this  kind,  where  premises  leased  did  not  sub- 
let to  advantage,  are  very  fertile  ones. 

Profit  Insurance. 

Insurance  of  this  character  is  comparatively  new  and  it 
presents  features  that  a  good  many  companies  object  to  and 
many  absolutely  prohibit.  A  profit  insurance  policy  is  a  danger- 
ous instrument  to  put  into  the  hands  of  any  but  the  most  repu- 
table and  reasonable  of  assured.  In  itself  it  creates  at  once  a 
moral  hazard  which,  while  it  may  not  be  recognized  as  suc^i  by 
the  honest  manufacturer  or  merchant,  still  does  exist,  and  to 
those  in  the  business  whose  virtue  is  of  a  less  rugged  type,  it 
presents  a  constant  temptation  to  make  sure  of  a  greater  profit 
than  the  conditions  of  the  business  warrant.  It  matters  not 
what  the  nature  of  the  business  is,  similar  conditions  exist 
under  insurance  of  this  form.  The  fire  insurance  policy  which 
the  assured  carries  will  make  good  to  him  the  loss -of  the  plant 
which  he  is  operating,  as  well  as  of  its  contents  of  every  character, 
and  if  we  add  to  that  the  assurance  that  the  profit  on  all  of 
his  unsold  merchandise  will  immediately  become  his  in  the 
event  of  a  fire,  we  must  admit  that  the  temptation  placed 
before  the  manufacturer  or  merchant,  in  times  of  slow  business 
and  poor  trade,  is  one  that  weak  humanity  is  sorely  tempted 
to  avail  itself  of.  Many  people  would  view  with  comparative 
equanimity,  the  destruction  of  their  property,  provided  it  is 
well  protected  by  a  fire  insurance  policy,  but  they  might  be 
sorely  disturbed  if  at  the  same  time,  the  profit  which  they  had 
expected  to  receive  from  merchandise  in  their  hands  was  taken 
away  from  them  and  at  this  point  profit  insurance  steps  in  and 
virtually  says,  "why  lose  anything?"  Why  not  regain  your 
lost  plant,  and  in  addition,  all  of  the  benefit  that  would  have 


^       102 

come  to  yoti  from  the  conduct  of  a  profitable  business?"  Still 
further  i^s  the  mcrease  of  hazard  created  where  slow  moving 
stocks,  old  styles  of  merchandise  and  seemingly  unsalable  articles 
form  a  large  portion  of  the  assets  of  the  business. 

Profit  insurance,  therefore,  can  only  be  written  with  safety 
by  confining  it  to  successful,  live  concerns  of  established  repu- 
tation and  financial  worth,  and  even  then  it  would  not  appear 
amiss  to  incorporate  a  clause  in  the  policy  specifying  that  in  the 
event  of  any  loss,  a  fixed  percentage  of  the  profits  should  be 
the  limit  of  the  claim  to  be  made  under  the  insurance,  much  in 
the  same  manner  that  the  three-quarter  value  clause  is  applied 
in  writing  certain  properties.  In  addition  to  this  there  should 
be  an  adequate  co-insurance  clause  attached  which  should  defi- 
nitely fix  the  relation  between  the  amount  of  insurance  carried 
and  the  total  profits  derived  from  the  business  for  the  period 
of  the  insurance.  Under  any  condition,  insurance  of  this  charac- 
ter should  never  be  written  for  concerns  or  individuals  whose 
system  of  bookkeeping  is  not  of  such  a  definite  character  as  to 
show  clearly  the  business  conditions,  especially  as  regards  the 
profit  made. 

The  Danger  of  Confusion. 

So  much  in  a  general  way  for  these  four  kinds  of  insurance 
that  are  closely  allied  to  the  direct  fire  lines.  To  me  it  seems 
as  if  one  of  the  dangers  attendant  on  writing  these  classes  of 
other  than  fire  insurance  was  a  tendency  to  mix  their  various 
functions  and  one  or  two  illustrations  may  serve  to  bring  that 
condition  more  clearly  to  your  minds.  I  have  before  me  a  use 
and  occupancy  and  ''expense"  form  issued  by  one  of  our  best 
known  and  most  successful  companies,  which  reads  in  part: 

Some  Irregular  Forms. 

"$ On  the  Use  and  Occupancy  of  building  and  machinery 

of situate and    occupied.. If    the    said    building    and 

its  machinery  equipment  be  destroyed  or  so  damaged  by  fire  as  to  neces- 
sitate the  total  or  partial  suspension  of  operations,  this  Company  shall 
be  liable  under  this  policy  for  loss  of  net  profits  on  goods,  the  production 
of  which  is  thereby  prevented." 

The  feature  of  this  form  to  which  I  want  to  call  particular 
attention  is  in  the  above  use  of  the  words  ''net  profits  on  goods, ^' 
for  there  is  no  qualifying  clause  in  the  remainder  of  the  form 
that  indicates  that  the  use  of  the  word  "profits"  is  other  than 
the  ordinary  understanding  of  that  word.  If  the  insurer  and 
the  insured  know  exactly  what  this  form  means  and  are  willing 
to  accept  it,  there  would  seem  to  be  no  objection  to  its  use, 
but  I  fail  to  see  how  it  can  rightfully  be  termed  a  use  and  occu- 
pancy contract. 


103 

Another  somewhat  puzzUng  and  vague  form  that  we  run 
across  occasionally  masquerading  as  a  use  and  occupancy  con- 
tract, is  that  which  is  especially  designed  to  cover  goods  that 
are  exhibited  at  some  exposition  or  fair.  I  have  before  me  one 
that  is  designed  to  protect  the  exhibitor  for  one  week,  that  is, 
a  period  of  six  exhibition  days,  and  it  reads  as  follows: 

"$ being  this  Company's  pro  rata  share  of  the  agreed  expense 

and  profit  of  Assured  incurred  and  arising  from  the  carrying  on  of  an 

exposition   or   show   in   the building,    located ,    it   is 

understood  and  agreed  that  if  by  reason  of  fire  in  the  above  mentioned 
premises,  the  Assured  shall  be  prevented  from  carrying  on  the  show 
for  the  full  time  specified  in  the  contracts  with  exhibitors,  advertisers, 
or  others,  then  this  Company  shall  pay  to  the  Assured  its  pro  rata  share 
of  the  agreed  profit  and  expense  on  said  contracts,  or  the  uncompleted 
portion  thereof.  It  is  further  understood  and  agreed  that  in  the  event  of 
fire  so  damaging  the  building  that  the  Assured  shall  be  prevented  from 
carrying  out  his  contracts,  then  this  Company  shall  pay  its  pro  rata 
share  of  the  agreed  amount  of  expense  and  profits,  it  being  understood 
and  agreed  that  for  the  purpose  of  this  insurance,  the  amount  of  expense 

and  profit  is  valued  in  the  sum  of  $ provided  however,  that  should 

the  fire  occur  after  the'  date  of  the  opening  of  the  fair,  then  this  policy 
shall  be  subject  to  deductions  of  1/6  per  diem  for  such  time  as  shall 
have  elapsed  between  the  day  of  the  opening  of  the  fair  and  the  day 
of  the  fire." 

It  is  hard  to  define  just  what  this  form  is,  "expenses  and 
profits"  and  some  of  both.  It  certainly  is  a  legitimate  contract 
if  an  insurance  company  can  be  found  ready  to  undertake  it, 
and  I  do  not  doubt  that  there  are  those  that  will  gladly  do  so. 
Surely  it  is  a  very  desirable  policy  for  the  exhibitor  to  hold, 
since  so  far  as  its  protecting  him  goes,  he  has  very  little  to  worry 
about  in  case  the  premises  burn  up  during  the  exposition.  He 
doubtless  has  fire  insurance  to  pay  for  the  direct  loss  of  his 
exhibits,  and  his  labor  and  expected  profits  in  exhibiting  them 
would  be  cared  fcr  under  such  a  contract  as  the  above.  In  fact 
a  fire  would  be  as  good  as  the  show,  possibly  better.  From  the 
insurance  standpoint,  such  a  form  must  be  regarded  like  the 
horse  about  whose  merits  a  prospective  purchaser  asked  Abra- 
ham Lincoln's  advice,  —  "If  a  man  Hkes  that  kind  of  a  horse, 
that  is  the  kind  of  a  horse  he  would  Hke!" 

To  my  mind,  the  important  features  in  a  use  and  occupancy 
contract  are  embodied  in  words  Hke  the  following: 

A  Good  Use  and  Occupancy  Form. 

"It  is  agreed  that  if  by  reason  of  fire  on  the  premises  above  described 
occurring  during  the  continuance  of  this  policy,  the  building  and/or 
machinery  or  other  movable  property  therein  or  any  of  them  in  whole 
or  in  part  to  be  destroyed,  or  so  damaged  as  to  entirely  suspend  the 
production  of  finished  goods,  then  this  Company  shall  be  liable  at  the 
rate  of  1/300  part  of  the  amount  of  this  poHcy  per  day  for  each  working 
day  of  such  prevention  and  in  case  the  said  buildings  and,  or  machinery 
or  other  property  therein,  in  whole  or  in  part  be  so  damaged  as  to  prevent 
the  making  of  the  full  daily  average  production  of  finished  goods,  then 
this  Company  shall  be  liable  per  day  for  that  proportion  of  1/300  part 
of  the  amount  of  this  policy  which  the  said  production  so  prevented  bears 
to  the  full  daily  average  production  of  finished  goods. 


104 

"In  order  to  determine  the  full  daily  average  production  of  finished 
goods,  the  average  daily  production  for  the  corresponding  period  of  the 
previous  year  shall  be  taken,  subject  to  such  increase  or  diminution  as 
charges  in  the  capacity  of  the  plant  or  condition  of  the  business  shall 
warrant,  but  not  to  exceed  in  any  case,  the  amount  of  this  policy. 

"Loss  if  any,  to  be  computed  from  the  day  of  the  occurrence  of 
any  fire  to  the  time  when,  after  the  adjustment  of  the  loss  on  the  above 
described  property,  the  said  premises  could  with  reasonable  diligence 
and  despatch  be  replaced  and  the  machinery  installed  therein,  but  not 
to  be  limited  to  the  date  of  expiration  named  in  this  policy." 

The  above  agreement  seems  to  me  to  cover  everything  that 
can  reasonably  be  expected  from  insurance  of  this  sort.  It  makes 
no  mention  of  profits,  but  it  aims  to  make  good  the  loss  of  pro- 
ducing power  to  the  extent  that  such  production  is  curtailed, 
which  is,  to  my  mind,  the  legitimate  object  of  use  and  occupancy 
insurance. 

This  form  is  a  combination  of  a  number  of  forms  in  use 
by  large  manufacturers  and  merchants.  The  phraseology  of 
course,  in  the  case  of  the  latter  having  to  be  changed  somewhat 
to  accomodate  itself  to  the  difference  between  trading  and 
producing. 

A  Good  Rent  Form. 

We  have  already,  in  speaking  of  rent  insurance,  given  an 
illustration  of  what  seems  to  me  a  good  form.  Another  that 
appears  to  present  the  features  that  can  justly  be  considered, 
might  read : 

"$ on  the  Rents  of  the building  while  occupied 

situate 

"It  is  understood  and  agreed  that  if  said  building  or  any  part  thereof 
shall  be  rendered  untenantable  by  fire,  so  as  to  cause  an  actual  loss  of 
Rents  to  the  Assured,  this  Company  shall  be  liable  for  such  loss  of  Rents 
not  exceeding  the  sum  hereby  insured. 

"The  Assured  agrees  to  rebuild  or  repair  said  building  in  as  short 
a  time  as  the  nature  of  the  case  will  admit  and  the  sum  insured  will  be 
taken  as  the  yearly  rent  of  the  building  and  this  Company  shall  be  liable 
only  for  such  proportion  of  any  loss  as  the  sum  hereby  insured  bears 
to  the  annual  rent  of  said  building. 

"Loss  to  be  computed  from  the  date  of  the  fire  and  to  cease  upon 
the  building  being  again  rendered  tenantable.  In  case  the  Assured  shall 
elect  not  to  rebuild  or  repair,  then  the  loss  of  Rent  shall  be  determined 
by  the  time  which  would  have  been  required  for  such  purposes." 

Then  follows  an  agreement  for  arbitration  in  the  event  of 
disagreement  over  the  time  required. 

This  form  properly  protects  the  assured  and  is  a  clearly 
understandable  contract  on  the  part  of  the  insurer.  There 
is  a  tendency,  unfortunately,  in  some  localities  to  broaden 
these  rent  forms  materially,  and  I  have  before  me  one  that  is 
not  satisfied  with  the  actual  loss  of  rent,  but  inserts  in  a  rather 
obscure  manner  the  words  already  referred  to  and  reading 
"or  rental  value  to  the  assured." 


105 

A  Good  Leasehold  Interest  Form. 

A  leasehold  interest  form  that  embodies  what  seems  to 
me  the  proper  features  for  insurance  of  this  kind  would  read: 

"$ — on  his  leasehold  interest  in   the building  occupied, 

situate... 

"It  is  understood  and  agreed  that  this  insurance  is  intended  to 
indemnify  the  Assured  against  loss  of  revenue  from  rents  received  in 

excess  of  amount  to  be  paid  by  him  to under  a   certain  lease  of 

said    premises    dated day    of for years    at    the    yearly 

rental  of 

"In  case  of  the  total  destruction  of  the  premises,  thereby  vitiating 
the  above  mentioned  lease,  then  this  company  agrees  to  pay  the  whole 
amount  of  this  policy,  less  an  amount  for  the  expired  part  of  the  year, 
which  amount  for  the  purpose  of  this  insurance,  will  be  calculated  at  the 
rate  of  $ per  annum  from  the day  of.. 

"In  case  of  the  partial  destruction  of  the  premises  by  which  the 
lease  is  not   unimpaired,   then  this   Company   will  pay  the  amount  of 

Rent  so  lost  not  exceeding  the  rate  of  $ ..per  annum  in  excess  of 

amount  paid  to  the  lessor  or  owner,  during  the  time  the  premises  are 
untenantable." 

Then  follows  the  arbitration  clause  in  event  of  disagreement. 

This  form  may  seem  somewhat  cumbersome,  and  I  have 
before  me  several  specific  forms  relating  to  certain  particular 
properties  that  in  certain  of  their  details  are  possibly  more  explicit, 
but  the  general  points  that  should  be  clearly  understood  by 
both,  parties  to  the  contract  in  entering  into  an  agreement 
of  this  sort,  seem  to  me  to  be  well  and  definitely  fixed  by  the 
form  as  cited. 

A  Good  Profit  Insurance  Form. 

A  form  applicable  to  insurance  of  this  kind  can  easily  be 
very  brief  and  at  the  same  time  fully  exphcit.  In  fact,  a  form 
like  the  following,  would  seem  to  me  to  reach  adequately  almost 
any  case  that  might  arise. 

"$ on  the  net  Profits  derived  from business  as  dealers 

in    contained  in  building  situated on  profits  from  their  stock 

in  trade,  their  own  or  held  by  them  in  trust  or  on  commission  or  sold  but 

not  delivered.  ,    ,,  ,      ,.   ,  ,    'r      .v 

"In  case  of  total  loss  by  fire,  this  Company  shall  be  hable  for  the 

amount  hereby  insured.  ,  .-     ^  ,    n  t.     i-  ui     r 

"In  case  of  partial  loss  by  fire,  this  Company  shall  be  liable  for 
such  proportion  of  the  amount  heieby  insured  as  the  value  destroyed 
bears  to  the  average  daily  value  of  said  stock  for  the  year  preceding  the 
date  of  said  fire,  subject,  however,  to  variations  in  values  and  profits 
as  shall  result  from  changes  in  the  market  prices  ot  materials,  supplies 
and  manufacturing    processes." 

This  form  is  absolutely  clear  in  all  of  its  provisions,  and 
it  certainly  serves  to  bear  out  what  we  have  already  said  m 
speaking  more  particularly  of  profit  insurance:  namely,  that 
its  safe  prosecution  is  wholly  dependent  on  the  evidence  of 
satisfactory  bookkeeping  on  the  part  of  the  assured,  and  of  a 
healthy  business  condition  revealed  thereby. 


106 

Sprinkler  Leakage  Insurance. 

Before  we  pass  on  to  forms  covering  in  extended  areas,  I 
want  to  call  your  attention  to  one  other  increasingly  common 
form  of  insurance  against  other  than  direct  fire  loss.  There 
is  an  old  saying,  or  proverb,  to  the  effect  that  there  is  no  great 
loss  without  some  small  gain.  In  the  class  of  insurance  I  want 
to  call  your  attention  to  for  a  moment,  this  proverb  might  be 
reversed  so  as  to  read  "There  is  no  great  gain  without  some 
small  loss."  The  installation  of  automatic  sprinklers  results, 
not  only  in  greatly  safeguarding  the  property  of  the  assured 
and  minimizing  the  losses  that  otherwise  would  come  to  him, 
but  also  it  enables  him  to  secure  a  very  much  lower  rate.  The 
benefits  certainly  are  great,  but  with  this  great  benefit  and 
saving  there  is  a  small  element  of  danger  and  possible  loss. 

Insurance  for  loss  that  may  be  caused  by  the  leakage  of 
an  automatic  sprinkler  system  is  becoming  more  and  more  of 
a  necessity  as  installations  of  these  systems  are  growing  more 
common.  Fortunately,  the  mechanical  devices,  not  only  in 
the  sprinklers  themselves,  but  in  the  way  they  are  attached 
and  supervised,  have  improved  so  greatly  that  the  percentage 
of  claims  caused  by  sprinkler  leakage  is  a  steadily  decreasing 
one.  Accidents  will  happen  though,  water  hammer  in  the  pipes 
may  cause  a  weak  sprinkler  to  slowly  develop  a  leak,  an  acci- 
dental blow  either  from  broken  machinery  or  the  careless  handling 
of  a  ladder,  or  any  other  movable  appliance  may  break  one  of 
the  sprinkler  heads  off.  Or,  and  perhaps  this  is  the  most  fre- 
quent cause  of  sprinkler  leakage,  freezing  of  the  water  in  the 
system  will  cause  broken  pipes  and  strained  sprinkler  heads. 
It  speaks  well  for  sprinkler  equipments  that  these  mishaps 
are  infrequent  but  the  danger  is  a  present  one  and  at  rare  inter- 
vals damage  occurs  that  must  be  made  good  by  insurance 
of  some  sort. 

Since  sprinklers  are  directly  promoted  by  the  fire  insurance 
companies  and  are  the  means  of  greatly  reducing  the  losses 
that  come  to  them,  and  since  their  installation  and  maintenance 
are  indirectly  supervised  by  these  insurance  companies,  it  is 
only  proper  that  these  companies  should  guarantee  freedom 
from  loss  on  insured  properties  through  accidents  to  the  auto- 
matic sprinkler  system  from  other  agency  than  that  of  fire. 

You  are  doubtless  aware  that  the  damage  that  may  be 
caused  by  water  discharged  by  a  sprinkler  opening  in  the  event 
of  a  fire,  is  as  much  covered  by  the  direct  fire  policy  as  is  the 
damaged  caused  by  the  fire  itself.  We  are  now  considering 
the  damage  that  may  result  from  a  sprinkler  discharging  owing 
to  some  other  cause  than  that  of  fire.  It  is  this  emergency  that 
we  wish  to  guard  against,  and  by  the  use  of  a  proper  form  in 
the  policy  contract,  liability  of  this  sort  may  be  assumed. 


107 

Before  we  take  up  such  forms  in  detail,  there  are  certain 
features  which  must  be  carefully  taken  into  account  in  the  writing 
of  sprinkler  leakage  insurance.  For  instance,  the  amount 
that  it  is  proper  to  carry  under  a  policy  of  this  sort.  The  general 
practice,  I  beHeve,  is  that  where  sprinkler  insurance  is  carried, 
it  should  be  so  carried  as  to  not  exceed  5%  to  10%  of  the  amount 
that  is  insured  under  the  direct  fire  poHcies.  This  is  assuming 
that  the  insurance  under  the  fire  poHcy  represents  at  least  90% 
of  the  value  of  the  property  covered.  Conditions  will  vary 
with  different  risks,  the  points  principally  taken  into  consid- 
eration being,  what  is  the  greatest  damage  that  could  result 
from  the  accidental  discharge  of  any  one  sprinkler,  owing  to 
the  arrangement  of  the  building  and  the  distribution  of  stock 
and  machinery  ?  You  can  see  readily  how  necessary  it  is  to  take 
these  conditions  into  account,  and  also  how  unHkely  it  is  that 
more  than  one  sprinkler  would  meet  with  accident  and  commence 
discharging  at  the  same  time. 

Companies  writing  insurance  of  this  character  have  no 
fixed  tariff,  but  each  contract  is  made  at  a  price  based  on  their 
individual  judgment,  after  full  information  regarding  the  prop- 
erty to  be  covered  has  been  secured.  The  construction,  arrange- 
ment, and  height  of  the  building  should  be  known,  the  heating 
and  lighting  appHances,  the  make  of  sprinklers,  the  time  they 
have  been  in  service  and  the  presence  and  efficiency  of  an  auto- 
matic alarm  system,  one  that  will  operate  by  the  motion  of  the 
water  through  the  system  and  not  be  dependent  solely  upon 
the  action  of  heat.  You  can  readily  see  that  a  condition  of 
sprinkler  leakage  brings  about  a  state  of  affairs  where  the  ordi- 
nary thermostat  system  or  heat  alarm  would  not  be  effective, 
while  a  rotary  alarm  operated  by  the  motion  of  the  water  in 
the  pipes  would  give  prompt  notice  that  there  was  a  discharge 
at  some  point  which  would  call  for  immediate  attention.  So 
far  as  we  can  learn,  the  general  situation  over  sprinkler  leakage 
insurance  is  that  the  same  is  usually  written  to  about  the  extent 
of  5%  of  the  value  of  the  property  covered  with  a  varying  range 
of  rates,  probably  averaging  not  far  from  %  of  1%. 

Some  companies  have  charters  sufficiently  broad  to  enable 
them  to  write  insurance  of  this  character,  while  others  are  re- 
stricted in  this  respect  and  cannot  undertake  it.  Competition, 
and  especially  the  attitude  taken  by  the  Mill  Mutuals  has 
caused  more  and  more  of  the  stock  companies  to  include  insurance 
of  this  character  among  their  writings. 

The  form  for  sprinkler  leakage  insurance  issued  by  the 
Manufacturers  •  Mutual  Insurance  Companies  ordinarily  reads 
as  follows : 


108 

Mutual-Sprinkler  Leakage  Form. 

"To - of • 

"In  consideration  of  the  maintenance  of  an  automatic  sprinkler 
system  for  the  prevention  of  loss  by  fire  upon  the  property  insured  by 
Policy  No of  the Manufacturers  Mutual  Insurance  Com- 
pany of -. 

"The  said  Company  does  also  insure  the  party  thereby  assured 
against  all  loss  or  damage  that  may  occur  from  the  accidental  leakage 
of  the  said  sprinkler  system,  upon  the  property  insured  against  fire  by 
the  policy  above  mentioned,  while  the  said  fire  policy  continues  in  force 
and  no  longer,  but  this  policy  does  not  cover  damage  to  a  reservoir,  tank, 
pipe,  or  other  apparatus,  by  whose  failure  the  leak  is  caused. 

"Provided  that  this  Company  shall  be  liable  for  only  such  pro- 
portion of  the  sprinkler  leakage  loss  as  the  amount  insured  on  said  propel ty 
against  fire  by  the  Policy  above  mentioned  bears  to  the  whole  amount 
of  fire  insurance  thereon. 

"Provided  also  that  the  total  amount  of  insurance  under  this  Policy 
shall  not  exceed  the  amount  of  the  fire  insurance  policy  above  mentioned." 

Following  this  form  is  a  paragraph  providing  for  conditions 
of  cancellation. 

Stock  Company  SprinklivR  Leakage  Form. 

A  form  commonly  used  by  the  stock  companies  for  insurance 
of  this  character  reads  as  follows : 

"Does   insure for   the   term   of from   the   day   of 

19 ,  at  noon,  to  the day  of 10 at  noon,  to  an  amount 

not  exceeding dollars,   to  wit:     Against  all   direct  loss  or  damage 

caused  by  the  accidental  dicharge  or  leakage  of  water  from  the  auto- 
matic sprinkler  system,  including  tanks  supplying  it,  except  as  herein- 
after provided,  in  or  on  the  buildings  now  erected  and  occupied  wholly 
or  partly  by  the  assured  (whether  the  accident  occurs  in  the  portion 
occupied  by  the  assured  or  not),  described  and  located  as  follows: 

"And  the  Company  shall  be  liable  under  this  contract  for  all  direct 
loss  or  damage  sustained  by  the  assured  occasioned  by  such  discharge 
or  leakage,  provided  same  is  caused  by  any  accident  (including  freezing), 
and  applying  to  all  property,  real  or  personal,  owned  by  the  assured,  or 
to  the  property  of  others  held  by  the  assured  in  trust  or  on  commission 
or  sold  but  not  removed,  and  for  which  the  assured  is  legally  liable,  while 
situate  upon  the  premises  above  described,  but  this  Company  shall 
not  be  liable  for  loss  or  damage  occasioned  by  such  discharge  or  leakage 
when  such  discharge  or  leakage  is  caused  by  fire,  Hghtning,  earthquake, 
explosion,  invasion  of  foreign  enemies,  civil  commotions,  riots,  any 
military  or  usurped  power,  order  of  civil  authority,  or  any  fraudulent 
act  of  the  Assured.  It  is  further  understood  and  agreed  that  the  entire 
liability  of  this  Company  under  this  contract  shall  under  no  circumstances 
exceed  the  sum  insured,  for  any  loss,  claim,  or  damage  whatsoever,  and 
that  this  Company  shall  not  be  liable  under  this  contract  for  any  loss  or 
damage  to  the  automatic  sprinkler  system  itself." 

Oftentimes  this  contract  is  followed  by  numerous  clauses 
regarding  certain  exempted  properties,  permits  for  alterations, 
a  description  of  the  method  to  be  -followed  in  the  event  of  loss, 
and  the  filing  of  a  claim  thereunder.  Also,  provisions  for  the 
manner  in  which  such  a  policy  may  be  cancelled. 

You  will  note  that  in  the  main,  these  two  contracts  of  the 
mutuals  and  of  the  stock  companies  are  essentially  the  same 
though   the   phraseology  varies   somewhat.      The  mutual   form 


109 

eliminates  damage  to  reservoir,  tank,  pipe  or  other  apparatus 
by  whose  failure  the  leak  is  caused,  while  the  stock  form  says 
nothing  about  that,  assuming,  evidently,  that  leakage  from  a 
sprinkler  system  that  would  cause  damage  would  doubtless 
be  confined  to  the  sprinklers  themselves.  The  stock  form  fur- 
ther eliminates  loss  for  mishaps  that  might  occur  from  what 
are  ordinarily  termed  "Acts  of  God,  or  the  Nation's  enemies," 
while  the  mutual  form  makes  no  mention  of  loss  under  such 
conditions  not  being  covered  by  the  contract.  Perhaps  the 
more  important  feature  of  contrast  in  these  two  contracts  is, 
that  while  the  mutual  form  states  that  "This  Company  shall 
be  liable  for  only  such  proportion  of  the  sprinkler  leakage  loss 
as  the  amount  insured  on  said  property  against  fire  by  the 
policy  above  mentioned  bears  to  the  whole  amount  of  fire  insur- 
ance thereon;"  reference,  you  note,  is  made  here  to  the  fact  that 
is  brought  out  in  the  first  paragraph  of  the  mutual  form,  namely 
—  that  this  sprinkler  leakage  insurance  is  made  a  part  of  a  regular 
fire  policy.  The  stock  form  we  are  discussing,  is  a  sprinkler 
leakage  form,  pure  and  simple,  wholly  independent  of  the 
fire  insurance  policies  on  the  same  property.  Therefore,  no 
reference  to  them  would  be  needed.     * 

Either  of  these  forms  are  good  and  seemingly  free  from 
defects.  They  are  surely  clear  in  every  intent  and  are  desirable 
policies  for  an  assured  to  have,  especially  at  the  low  cost  at  which, 
toda^^  insurance  of  this  character  can  be  obtained. 

At  times,  sprinkler  leakage  policies  give  rise  to  very  puzzling 
questions  in  connection  with  losses.  The  worst  conundrum 
of  this  character  that  has  ever  been  referred  to  me,  and  regarding 
■which  the  correct  ruling  is  still  a  matter  of  doubt,  is  the  following: 
You  will  note  that  sprinkler  leakage  policies  state  that  they 
insure  against  direct  loss  or  damage  sustained  by  the  assured 
by  water  discharge  or  leakage  from  the  automatic  sprinkler 
system. 

Under  the  above  stipulation,  the  question  was  raised,  as 
to  what  would  be  the  condition  where  a  leakage  from  the  sprink- 
lers caused  a  short  circuiting  of  an  electric  system,  and  a  result- 
ing fire?  Would  the  assured  look  for  the  recovery  of  his  total 
damage  from  his  sprinkler  leakage,  or  his  fire  policies' 


Standard  Policy — Clauses  and  Forms 
Fourtk  Pat)cr 

BY 

WILLIAM  B.  MEDLICOTT 
Forms  of  Extended  Area 

Forms  to  Cover  in  More  than  One  Place. 

What  do  we  mean  by  this?  The  usual  iire  poHcy,  after 
describing  the  property  covered,  defines  the  locaUty  where  it 
is  insured,  that  is,  it  fixes  its  field  of  operation  in  some  one  place. 

It  would  be  not  only  very  inconvenient,  but  in  fact  impossi- 
ble, with  moving  properties  to  protect  them  against  fire  loss 
in  their  journeyings,  by  issuing  a  separate  policy  to  cover  in 
every  place  that  they  might  be  in.  Forms  are  devised,  therefore, 
to  cover  in  any  place  where  such  moving  properties  might  be. 
All  marine  insurance  forms  are  of  necessity  of  this  nature. 
A  marine  policy  derives  its  name  from  its  being  originally  devised 
to  insure  properties  in  transit  by  water.  Properties  being  carried 
by  ships  or  boats  from  one  place  to  another  on  the  water.  Insur- 
ance of  this  sort  is  one  of  the  very  oldest  forms  to  come  into  use. 
The  perils  of  the  sea,  both  from  shipwreck  and  fire,  were  recog- 
nized long  before  the  danger  of  loss  from  fire  to  properties  on 
the  land  was  given  much  thought.  As  time  has  gone  on,  the 
broad  covering  quality  essential  to  the  marine  policy  has  been 
found  applicable  to  moving  properties  on  land  as  well  as  sea,  and 
in  consequence  all  forms  covering  property  in  changing  location 
have  partaken  of  much  that  originally  was  confined  to  strictly 
marine  or  water  born  risks.  The  automobile  policies  now  being 
written  so  freely  are  good  illustrations  of  the  way  in  which 
the  marine  form  is  now  being  used.  The  ordinary  marine 
policy  usually  confines  itself  to  property  while  in  some  particular^ 
vessel  or  vessels,  it  does  not  protect  against  loss  from  perils 
of  the  sea,  at  some  one  particular  point,  but  anywhere  that 
the  journeyings  of  the  containing  vessel  may  reach.  In  the 
same  way  the  fire  policy  designed  to  cover  moving  property, 
does  not  specify  that  its  protection  shall  be  limited  to  that 
property  in  some  one  particular  place.  Its  purpose  is  to  pro- 
tect the  property  anywhere  within  certain  more  or  less  widely 
defined  limits.  Such  poHcies  in  a  general  way  are  described 
as  floaters. 


Ill 

Floaters. 

The  use  of  this  title  in  defining  a  certain  class  of  fire  insur- 
ance policies  is  a  very  broad  one.  In  fact,  its  meaning  in  England 
is  quite  different  from  that  attaching  to  it  in  this  country. 
There  they  speak  of  a  "floater"  as  a  policy  that  is  devised  to 
sort  of  fill  in  the  shortages  of  other  more  specific  insurance, 
that  may  be  disclosed  by  destroyed  values  at  the  time  of  a  loss. 
They  use  it  more  in  the  way  that  we  speak  of  "excess"  insurance. 
We,  while  we  regard  excess  insurance  as  one  kind  of  floater, 
still  speak  of  it  as  excess  and  confine  the  use  of  the  name  "floater" 
to  an  insurance  that  travels  with  a  movable  property  or  prop- 
erties that  are  in  various  somewhat  indefinitely  defined  locations. 
We  think  of  it  as  a  sort  of  Guardian  Angel,  and  when  injury 
by  fire  occurs  to  any  of  the  property  under  its  care,  it  at  once 
interposes  itself  and  seeks  to  alleviate  the  loss.  It  is  a  kind  of 
journeying  physician^  ever  with  the  traveler  and  always  at 
hand  to  restore  him  to  health  if  possible. 

There  are  many  forms  which  insurance  of  this  sort  may 
take.  There  are  those  that  are  devised  for  some  specific  property 
and  specified  owner,  of  which  the  most  common  form  is  what 
is  known  as  a  ''Tourist  Policy''.  Then  there  are  those  that 
are  designed  to  cover  miscellaneous  goods  in  the  hands  of  trans- 
porting companies  or  individuals  who  hold  the  same  in  the 
capacity  of  ''Common  Carriers ^  Both  of  these  classes  are 
floaters  in  the  broad  sense  in  which  that  term  is  used,  though 
they  raise  very  different  questions  in  the  treatment  which  should 
be  accorded  to  each.  Let  us  in  considering  forms  applicable 
to  insurance  covering  in  extended  areas,  first  confine  ourselves 
to  the  forms  used  in  connection  with  so-called  tourist  poHcies. 

Tourist  Policies. 

A  poHcy  of  this  character,  is,  as  its  name  implies,  especially 
designed  to  accommodate  those  who  are  engaged  in  travelUng 
and  who  naturally  desire  to  carry  with  them  property,  usually 
in  the  form  of  clothing,  and  personal  belongings,  though  at  times 
the  forms  are  extended  so  as  to  cover  things  that  are  not  ordi- 
narily found  with  belongings  of  this  character.  Some  of  the 
forms  attaching  to  policies  of  this  nature  are  extremely  broad 
and  protect  against  loss  or  damage  from  more  than  fire  alone, 
in  fact,  they  are  practically  marine  poHcies  in  their  make-up. 
A  marine  form  for  this  purpose  reads  substantially  as  follows: 

Marine  Tourist  Form. 

"This  policy  witnesseth  that is  insured  in  the  sum  of  $ 

from  to-  on  baggage  and/or  personal  effects  being  the  prop- 

erty of'the  Assured  or  any  member  of  his  family  or  servant  accompanymg 
the  Assured  or  his  family. 


112 

"This  policy  attaches  from  the  time  the  property  insured  is  taken 
from  the  residence  of  the  Assured  and  continues  wherever  said  property 
may  accompany  the  Assured  oi  his  family  during  the  term  of  the  policy, 
coveiing  all  the  lisks  and  perils  of  fire,  lightning,  navigation  and  trans- 
portation, including  the  risk  of  theft  as  described  hereafter,  while  being 
transported  by  any  railroad,  express,  transfer  and/or  transportation 
company  and/or  by  any  steam-ship,  steam-boat  or  craft  on  the  ocean 
or  on  inland  waters,  and  to  cover  the  risk  of  fire  and  lightning  while  in 
any  hotel,  dwelling,  business  building  and/or  other  repository,  excepting 
theatres  and  other  places  of  public  amusement. 

"This  pohcy  covers  while  on  board  of  any  yacht  against  loss  caused 
only  by  stranding,  sinking,  burning  or  collision  of  the  yacht. 

"It  is  understood  that  this  policy  covers  against  loss  by  theft  while 
in  the  custody  of  any  common  carrier  or  other  bailee  (that  is,  the  person 
to  whom  the  goods  are  committed  in  tiust)  and  is  also  to  cover  against 
loss  by  theft  of  entire  trunks,  valises  or  other  shipping  packages  from 
rooms  occupied  by  Assured,  or  when  checked  in  any  hotel  or  boarding 
house,  provided  that  the  local  Police  authorities  are  notified  immediately 
upon  discovery  of  loss,  but  this  clause  shall  under  no  circumstances  be 
construed  to  include  pilferage,  nor  the  loss  b>  theft  of  articles  in  the 
custody  of  the  Assured,  only  as  herein  mentioned. 

"This  policy  does  not  cover  or  attach  in  the  residence  of  the  Assured 
nor  on  property  specifically  insured,  nor  in  storage,  nor  on  automobiles, 
or  motorcycles  and  their  appurtenances  or  equipment. 

"This  Company  shall  not  be  liable  for  loss  of  accounts,  bills,  currency, 
deeds,  evidences  of  debt,  money,  notes  or  securities,  under  any  circum- 
stances nor  for  loss  of  jewelry  or  similar  valuables  by  theft." 
Following  the  above  more  important  paragraphs  there  are  a 
number  of  warranties  frequently  attached  to  a  policy  of  this 
nature  regarding  breakage,  risks  of  war,  limitation  of  value, 
conditions  that  might  arise  when  the  property  covered  is  in 
several  places  at  the  same  time,  disregard  of  particular  average 
and  provisions  for  cancellation.  In  this  country,  policies  of 
this  character  are  only  limited  usually,  so  far  as  the  area  in 
which  they  apply,  by  the  limits  of  the  United  States  and  Canada 
and  on  steamers  or  sailing  vessels  between  places  in  these  two 
countries. 

Cover  More  Than  Fire  Damage. 

You  will  note  that  a  form  like  this  protects  against  other 
loss  than  that  which  may  be  caused  either  directly  or  indirectly 
by  fire.  Since  a  form  of  this  nature  is  so  comprehensive,  it 
is  usually  desired  in  preference  to  one  that  simply  safe-guards 
against  a  fire  loss  and  its  issuance  is  confined  to  such  companies 
as  are  chartered  to  do  a  marine  business.  As  we  are  considering 
forms  applicable  to  fire  policies  only,  and  also  since  the  majority 
of  fire  companies  are  not  operating  under  charters  sufficiently 
broad  to  enable  them  to  assume  all  of  these  outside  hazards, 
we  will  pass  on  to  the  consideration  of  such  a  form  as  is  directly 
applicable  to  the  ordinary  fire  policy.  A  form  of  this  nature 
will  read  substantially  as  follows: 

"$ — on (usually    wearing    apparel    and    personal    effects) 

the  property  of  the  Assured  and  membeis  of  the  family  wherever  they 
may  go  in  the  United  States  ol  America,  Mexico  or  Canada,  or  while 
being  transported  by  train,  boat  or  conveyance  of  any  kind. 


113 

"It  is  undei stood  and  agreed  that  this  policy  does  not  cover  in  any 
place  where  the  Assuied  has  specific  insurance  on  the  above  desciibed 
property. 

"It  is  understood,  if  in  case  of  loss  and  by  reason  of  such  loss,  the 
Assured  shall  acquire  a  right  of  action  against  any  individual  firm  or 
corporation,  for  damage  to  the  property  above  desciibed,  he  will  sign 
and  transfer  such  claim  to  this  Company  upon  receiving  payment  for 
loss  from  this  Company  and  subrogate  this  Company  to  all  his  rights 
and  demands  ot  every  kind  respecting  the  same  and  permit  suit  to  be 
brought  in  his  name,  but  at  this  Company's  risk  and  expense. 

"In  case  the  property  above  described  shall  be  in  different  places, 
this  policy  covers  at  each  place  that  proportion  of  the  whole  amount 
of  this  policy,  that  the  value  of  the  propertv  in  each  bears  to  the  value 
of  all. 

"But  it  is  at  the  same  time  declared  and  agreed  that  any  property 
included  in  the  terms  of  this  policy  shall  at  the  time  of  any  fire,  be  insured 
in  any  Marine  Insurance  Company,  this  policy  shall  not  extend  to  cover 
the  same,  excepting  only  as  far  as  relates  to  any  excess  of  value  beyond 
the  amount  of  such  Marine  Insurance  or  Insurances,  and  shall  not  be 
liable  for  any  loss  unless  the  amount  of  such  loss  shall  exceed  the  amount 
of  such  Marine  Insurance  or  Insurances,  which  said  excess  only  is  to  be 
under  the  protection  of  this  policy,  it  being  the  true  intent  and  meaning 
of  this  agreement  that  this  Company  shall  not  be  declaied  liable  for  any 
loss,  unless  the  amount  of  such  loss  shall  exceed  the  amount  of  the  Marine 
Insurance  or  Insurances,  and  then  only  for  such  excess." 

You  will  note  that  under  a  policy  of  this  kind,  one  may  insure 
against  fire  loss,  anything  that  the  insurance  company  will 
accept  and  allow  to  be  incorporated  in  the  property  description 
paragraph  of  the  form.  You  will  also  note  that  such  a  form 
protects  the  property  wherever  it  may  be  in  the  United  States, 
Mexico  and  Canada,  not  only  while  it  is  in  hotels  or  other 
buildings,  but  also  while  it  is  on  railroad  trains  or  steamboats, 
either  standing  or  in  transit. 

You  will  also  note  that  this  form  ceases  to  apply  at  any 
point  where  the  assured  has  this  same  property  specifically 
insured.  For  illustration,  suppose  that  a  party  intending  to 
travel,  packs  his  trunk  in  readiness  for  his  journey,  takes  out, 
from  a  certain  date,  a  tourist  floater,  such  as  we  are  describing, 
and  before  his  trunks  have  been  taken  from  his  dwelling,  a  fire 
occurs  and  damages  these  trunks  and  their  contents.  If,  under 
these  conditions  the  assured  has  a  poHcy  covering  the  contents  of 
his  dwelling,  he  must  look  to  that  for  his  indemnity.  If,  on 
the  other  hand,  he  has  not  such  a  policy,  but  does  hold  the 
tourist  policy  referred  to,  it  could  be  claimed  that  the  tourist 
policy  covered  under  this  form,  even  though  the  journey  had 
not  actually  commenced. 

Some  forms  still  further  define  the  liability  in  a  stiuation 
of  this  sort,  by  stating  that  the  policy  attached  from  the  time 
the  property  is  taken  from  the  residence  of  the  assured  and  ceases 
to  apply  as  soon  as  this  property  returns  to  the  residence  in 
question,  thus  eliminating  the  doubt  that  we  have  said  might 
arise  where  there  was  no  specific  insurance  on  the  tourist's  home. 


114 

The  Subrogation  Feature. 

The  Subrogation  Clause,  forming  a  part  of  the  form  we 
are  considering,  is  surely,  a  reasonable  provision,  for  it  would 
be  manifestly  unfair  either  for  the  assured  to  collect  damages 
both  from  the  transporting  company  and  the  insurance  company 
for  injury  to  the  same  property,  or  to  ask  the  insurance  companies 
to  stand  a  loss  that  was  guaranteed  against  by  the  transporting 
company.  Consequently,  if  the  insurance  company  pays  for 
the  loss  or  damage  to  the  property  while  in  the  hands  of  the 
transporting  company,  it  is  only  reasonable  that  the  right 
should  be  accorded  it,  of  taking  subrogation,  or  that  is,  of  having 
granted  to  it,  the  same  rights  of  collection  from  the  transporting 
company  that  the  assured,  under  his  contract  with  the  trans- 
porting company  was  in  possession  of. 

An  Average  Provision  Essential. 

The  clause  providing  that  if  the  property  covered  is  in 
several  different  places  that  the  proportion  of  the  whole  amount 
of  the  insurance  under  the  policy  that  is  applicable  to  the  par- 
ticular location  affected  by  the  fire  shall  be  regarded  as  the 
insurance  at  that  particular  point,  is  a  simple  application  of 
the  average  clause. 

Assume,  in  illustration  of  this,  that  a  tourist  had  three 
trunks  containing  property  of  equal  value  and  that  incident 
to  the  circumstances  of  his  journey,  two  of  these  trunks  were 
at  a  hotel,  while  the  third  remained  at  a  railroad  station  when 
a  fire  occurred  that  damaged  the  trunk  stored  therein.  Under 
the  provisions  referred  to,  one-third  of  the  policy  is  covered 
in  the  railroad  station  and  is  liable  for  the  loss  of  the  trunk 
therein  stored. 

The  final  paragraph  of  the  form  under  discussion,  raises 
the  excess  feature  and  you  will  recall  that  I  have  already  said 
that  excess  insurance  is  of  the  nature  of  a  floater,  and  as  we  pur- 
pose discussing  excess  insurance  a  little  more  fully  later  on,  we 
will  defer  speaking  in  detail  of  this  particular  clause. 

It  is  true  that  the  features  that  we  have  been  mentioning 
may  be  strictly  defined  as  forms,  and  there  are  also  several 
provisions  that  are  distinctly  of  the  nature  of  clauses.  Since 
these  so-called  ''clauses"  such  as  the  Subrogation  Clause,  the 
Average  Clause,  the  Exemption  of  Specific  Insurance  Clause, 
have  an  essential  and  very  direct  bearing  on  the  form  as  a  whole, 
it  seemed  best  to  anticipate  somewhat,  and  speak  of  them  as 
we  have  done. 

Not  infrequently  the  underwriter  is  called  upon  to  insure 
some  specific  piece  of  travelling  property  and  the  exercise  of 
careful  thought  is  necessary  in  determining  whether  insurance 
of  this  character  is  desirable  or  not.  To  illustrate  this,  let  us 
assume  that  the  subject  of  the  insurance  is  a  highly  valued  violin, 


115 

th'at  a  certain  artist  wishes  to  take  with  him  to  various  summer 
hotels  for  concert  purposes.  Here  is  a  very  susceptible  piece 
of  property,  and  while  it  is  an  article  that  can  usually  be  easily 
saved,  and  if  it  is  really  valued  by  the  owner,  undoubtedly 
would  be  the  first  thing  he  would  try  to  save  in  the  event  of  a 
fire  occurring,  yet  the  opportunities  suggested  for  an  excessive 
claim  that  could  probably  be  maintained,  are  very  great.  The 
assured  usually  regards  the  risk  attaching  to  an  article  of  this 
kind  as  very  slight  and  expects  that  the  insurance  can  be  written 
at  just  as  low  a  rate  as  he  obtained  on  his  household  furniture 
including  a  piano  and  other  musical  instruments  in  his  home. 
In  such  a  condition  as  we  are  describing,  the  owner  may,  quite 
likely,  be  living  in  a  dwelling  where  the  contents  are  rated  at 
say  seventy-five  cents  for  5  years.  When  he  commences  to 
travel,  he  and  his  violin  may  be  in  summer  hotels  of  varying 
merits,  rated  all  the  way  from  2  to  33^%  per  annum.  It  is 
difficult  to  get  the  average  assured  to  see  just  why  he  should 
pay  a  higher  rate  the  minute  his  violin  leaves  his  home  though 
very  apparent  to  the  underwriter.  In  considering  a  proposition 
of  this  kind,  actual  knowledge  of  the  true  value  of  the  property 
involved  is  a  very  essential  thing  and  while  the  form  and  the 
rate  cannot  reach  it,  the  underwriter  is  certainly  beholden  to 
consider  the  character  of  the  assured  very  closely  and  to  feel 
confident  that  he  really  prefers  the  violin  to  the  money  which 
might  be  easily  obtainable  under  such  a  policy  as  we  are  speaking 
of. 

I  have  dwelt  thus  at  length  on  this  simple  illustration, 
because  it  serves  to  show  the  hazards  and  opportunities  that  are 
presented  to  an  unscrupulous  property  owner  under  a  policy 
of  this  kind.  How  easy  it  is  in  a  summer  hotel,  for  instance, 
for  a  lamp  to  be  tipped  over  and  an  alleged  $500  violin  ruined 
without  at  the  same  time,  having  the  entire  building  burned  up ! 

The  Main  Objection  to  Floating  Insurance. 

The  main  objection  to  floaters,  is  that  the  more  extended 
the  area  of  their  operation,  the  greater  the  opportunity  for  loss 
and  the  greater  the  difficulty  in  determining  equitably  the  actual 
amount  of  that  loss,  renders  them  a  class  of  insurance  that  should 
bear  very  close  scrutiny  and  that  should  call  for  the  collection 
of  a  commensurate  rate. 

Common  Carriers. 

Another  form  and  a  more  important  one  probably,  attaching 
to  policies  covering  extended  areas  is  that  of  what  is  known 
as  Common  Carriers. 

Just  what  do  we  mean  by  a  "Common  Carrier".  I  have 
been  interested  to  look  up  the  definition  of  the  same  and  find 
that  competent  authorities  describe  it  as  follows:    "A  Common 


116 

Carrier"  is  a  person  who  undertakes  to  carry  goods  from  place 
to  place  for  hire.  He  is  a  public  servant  and  is  bound  to  carry 
and  is  responsible  for  every  injury  occasioned  to  the  goods 
by  any  means  whatsoever,  except  only  the  act  of  God  or  his 
country's  enemies."  Consequently,  when  goods  are  destroyed 
by  fire,  the  common  carrier  is  responsible  to  the  owner  whether 
he  has  been  guilty  of  neglect  or  not,  and  he  is  excused  from 
liability  only  in  the  following  cases,  which  usually  are  limita- 
tions fixed  by  law,  as  to  his  liability  in  his  capacity  as  a  common 
carrier. 

First,  where  the  transit  of  the  goods  is  ended  and  the  goods 
are  no  longer  in  his  custody  as  a  carrier.  He  is  then  a  warehouse- 
man and  is  subject  therefore,  to  the  liability  of  an  ordinary 
Bailee,  that  is,  the  person  to  whom  the  goods  are  committed 
in  trust. 

Second,  where  he  is  exempt  from  liability  by  some  law 
usually  denominated  the  "Carrier's  Act." 

Third,  whereby  the  terms  of  a  special  contract  between 
himself  and  the  bailor  (that  is,  the  person  who  delivers  goods 
to  another  in  trust),  he  is  exempt  from  liability.  For  example, 
a  railroad  company  entering  into  a  contract  to  carry  goods  to 
a  place  beyond  the  limits  of  its  own  lines  and  situate  upon  the 
line  of  another  company,  does  not  cease  to  be  liable  when  the 
goods  are  transferred  to  the  other  company.  If,  therefore,  the 
goods  are  destroyed  by  fire,  while  being  carried  by  the  second 
company,  the  first  company  is  responsible  by  virtue  of  the 
contract  which  is  made,  although  the  other  company  may  also 
be  liable  to  the  owner  for  the  loss. 

The  law  usually  relieves  the  common  carrier  of  liability 
for  certain  specified  properties  of  high  value,  such  as  jewelry, 
gold  or  silver  coin,  stamps,  notes,  securities,  unless  at  the  time 
of  delivery  of  them  to  him,  both  the  value  and  the  nature  of 
such  articles  shall  have  been  declared  and  in  accordance  there- 
with, charges  either  paid  or  an  engagement  to  pay  the  same 
accepted  by  the  person  who  may  receive  the  consignment.  For 
such  special  articles  the  carrier  may  demand  an  advanced  rate 
or  charge  which  is  to  be  guaranteed  by  a  receipt  of  notice  at- 
tached. Carriers  who  omit  to  affix  such  a  notice,  are  precluded 
from  the  benefits  so  far  as  the  right  to  the  extra  charge  is  con- 
cerned, but  even  in  that  case,  are  entitled  to  a  declaration  of 
the  value  and  nature  of  the  goods,  but  they  are  prohibited 
from  attempting  to  limit  their  liability  by  public  notice  as 
to  the  articles  not  exempt  by  law.  Special  contracts,  however, 
may  be  allowed. 

The  reason  that  we  have  spoken  of  these  features  of  common 
carrier  liability,  is  because  it  is  under  them  that  so  frequently 
in  claims  under  a  fire  policy  insuring  common  carriers'  liability, 
conditions  arise  wholly  unlooked  for  by  the  party  issuing  the 
policy  and  it  is  desirable  therefore  that  in  the  event  of  there 


117 

being  some  special  allowance  or  restriction  imposed  by  the  con- 
tract or  receipt  issued  by  the  common  carrier  in  accepting 
goods,  that  the  fire  policy  should  either  disclose  or  at  least  call 
attention  to  them.  A  good  illustration  of  this  has  occurred 
in  a  couple  of  losses  that  have  recently  been  up  for  consideration. 
Here  is  a  form,  reading  for  the  A.  &  C.  Railroad: 

An  Ordinary  Railroad  Carriers  Liability  Form. 

"On  merchandise  and  goods  their  own  or  for  which  the  Insured 
may  be  liable  or  held  by  the  Insured  as  Common  Carriers  or  warehousemen 
or  under  any  bill  of  lading,  including  all  charges  therein  advanced  or 
due  to  other  lines  or  railroads,  or  steamboats  carrying  such  merchandise 
or  goods  as  they  may  have  in  their  custody  or  for  which,  and  to  such 
extent  and  amounts  as  they  are  in  any  manner  responsible,  also  all  express 
pertaining  thereto,  and  on  all  stock,  materials  and  supplies  all  contained 
in  and  on  frame  building  and  structures  and  outside  on  wharf  on  premises 

known    as    piers    No.. situate... Permission   is   hereby    given 

to  have,  store  and  keep  and  use,  such  goods,  merchandise  and  articles 
as  are  incidental  to  the-  Transportation  Companies  and  the  business  of 
railroads,  steamboats  and  vessels  and  to  have,  keep  and  use  camphene, 
chemical  and  coal  oils  and  burning  fluids.  To  use  hoisting  engines,  and 
to  work  nights  and  for  other  insurance  without  notice  until  requested. 

"This  policy  insures  loss  if  any,  payable  to  said  A.  &  C.  R.  R. 
whether  that  Company's  interest  is  direct  or  as  lessee  of  some  other 
corporation,  it  being  understood  that  this  structure  is  upon  the  property 
of  one  of  the  corporations  whose  property  it  holds  through  lease." 
Then  follows  a  Mechanics'  Permit,  Electric  Light  Permit,  Light- 
ning, Automatic  Fire  Alarm  and  Watchman's  Clock  Clauses. 

The  intent  of  this  poHcy  seems  clearly  to  be  to  insure  the 
said  A.  &  C.  Railroad  in  their  capacity  of  common  carriers 
and  a  loss  having  occurred  on  the  premises  in  question,  the 
sums  required  of  the  railroad  on  account  of  damaged  merchan- 
dise were  in  turn  paid  to  it  by  the  insuring  companies.  Later 
it  appeared  that  certain  of  the  owners  of  goods  and  merchandise 
claimed  to  have  been  lost  in  the  fire,  brought  suit  against  the 
A.  &  C.  Railroad  and  all  of  the  companies  insuring  it,  on  the 
ground  that  the  policies  were  taken  out  by  the  railroad  as  well 
for  the  benefit  of  their  consignors  as  for  their  own  benefit,  and 
the  form  that  we  have  just  quoted,  insured  the  owners  of  the 
goods  against  loss,  as  well  as  the  railroad,  in  its  liabiHty  as 
common  carriers. 

A  condition  of  this  sort  brings  out  the  fact  that  everythmg 
must  depend  in  the  adjustment  of  such  a  claim,  as  to  how  far, 
under  their  contract  as  common  carriers,  the  railroad  was 
Hable  to  their  consignors.  How  this  suit  will  finally  be  dis- 
posed of,  is  a  matter  that  is  still  uncertain.  There  would  seem 
to  be  nothing  in  the  form  we  quoted  which  could  render  a  broader 
interpretation  than  that  in  the  second  line,  where  it  states, 
"as  Common  Carriers  or  Warehousemen"  and  again,  further 
down,  "to  such  extent  and  amounts  as  they  are  m  any  manner 
responsible."  Everything  you  will  see,  depends  upon  the  limit 
of  this  responsibility,  and  that  can  only  be  determined  by  know- 


U8 

ing  exactly  what  is  the  nature  of  the  contract  that  the  receipt 
given  by  the  railroad  to  its  consignors,  discloses. 

It  would  seem  from  a  condition  such  as  the  one  we  have 
just  described,  as  if  some  uniform  law  was  necessary  defining 
what  is  meant  by  common  carrier  liability  and  that  if  some- 
thing outside  of  the  intent  of  such  defined  liability  was  con- 
templated, that  it  should  also  be  required  to  have  it  fully  stated. 

An  effort  sometimes  to  avoid  complications  of  this  sort, 
is  made  by  the  insertion  of  a  clause  in  addition  to  the  descrip- 
tion of  the  rolling  stock  and  movable  property  of  a  railway. 
An  illustration  is  before  me  reading: 

A  Conflicting  Carrier  Form. 

"All  articles,  materials  or  apparatus,  appurtenances  to  operating 
this  railway  and  for  maintaining,  repairing  and  extending  the  same, 
their  own  or  held  by  them  belonging  to  others  for  which  they  may  be 
liable  and  on  freight  thereon  or  held  by  them  belonging  to  others  for 
which  they  may  be  liable,  contained  in  any  of  the  buildings  of  the  said 
Railroad  or  in  any  of  its  cars  at  any  point  upon  the  line." 
Among  the  many  restrictive  clauses  attached  to  the  foot  of 
this  form,  is  one  reading: 

"This  policy  does  not  cover  the  Assured's  liability  as  Common 
Carrier." 

The  policy  in  question  is  a  straight  fire  policy,  and  just  how  to 
reconcile  the  two  paragraphs  referred  to,  is  something  of  a  puzzle. 
Also,  it  is  only  fair  to  say,  the  final  arbitration  of  a  claim  that 
has  arisen  thereunder,  is  yet  uncertain.  In  this  instance  a 
certain  party  delivered  certain  freight  to  the  road  for  transpor- 
tation and  took  an  ordinary  receipt  therefore.  Apparently 
the  first  paragraph  reading,  "on  freight  held  by  them  belonging 
to  others  for  which  they  may  be  held  liable,"  would  appear 
to  make  the  road  liable  to  the  consignor,  on  the  other  hand, 
the  companies,  by  the  second  paragraph,  would  appear  to  be 
freed  from  liability  if  this  particular  freight  in  question  was 
accepted  by  the  road  in  its  capacity  of  common  carrier.  This 
illustration  again  emphasizes  the  point  we  have  already  spoken 
of,  namely  that  in  drafting  forms  of  this  sort,  the  position 
of  the  transporting  company  can  only  be  clearly  defined  when 
the  nature  of  the  contract  into  which  it  has  entered  with  its 
consignor  is  fully  disclosed. 

Some  of  the  difficulties  that  arise  in  the  insurance  of  common 
carriers,  also  appear  when  we  insure  directly  for  its  owner, 
property  while  in  transit. 

An  interesting  and  still  unsettled  claim  has  arisen  under 
a  form  of  this  nature  reading : 

A  Broad  Form  for  Owners  Liability  in  Transit. 

"On  merchandise,  principally  woolen  goods,  their  own  or  held  in 
trust  or  on  commission,  and  for  which  they  may  be  held  liable,  in  transit 
between or  any  other  place  in  the  United  States  to  Boston,  Mass., 


119 

and  vice  versa,  and  at  either  end  of  the  route  until  deHvery,  subject  to 
the  following  conditions  of  average  annexed: 

Other  Insurance  Permitted 
Average  Clause 

"It  is  understood  and  agreed  that  in  case  of  loss  under  this  policy 
this  Company  shall  be  liable  only  for  such  proportion  of  the  whole  loss 
as  the  amount  of  this  insurance  bears  to  the  cash  value  of  the  whole 
property  herein  described,  at  the  time  of  the  fire.  —  Lightning  Clause." 

The  claim  is  made  for  damage  caused  by  a  fire  resulting 
from  sulphuric  acid  being  carried  in  the  same  car  with  the  prop- 
erty (in  this  case  machinery)  and  one  or  more  of  the  acid  car- 
boys becoming  broken.  The  damage  was  done  on  some  one 
of  the  four  days  occupied  in  transit  and  at  an  unknown  point 
in  Pennsylvania,  New  Jersey,  New  York,  Connecticut  or  Massa- 
chusetts. 

The  following  questions  arise : 

1.  Under  the  form,  the  policy  being  written  in  Massachu- 
setts, is  the  policy  Hable  for  a  loss  in  any  other  state? 

Answer.     Yes. 

2.  Is  the  issuing  of  such  a  policy  legal  since  it  covers  prop- 
erty that  may  be  outside  the  state  in  which  the  policy  is  written? 

Answer.  Yes,  the  policy  being  a  floater  and  covering  prop- 
erty that  at  times  is  in  the  state  where  the  policy  was  written, 
also  the  assured  in  this  instance  were  a  Massachusetts  corpora- 
tion. 

3.  Can  machinery  be  classed  as  merchandise  and,  therefore, 
is  a  claim  valid  on  machinery  insured  as  merchandise? 

Answer.  Yes.  Merchandise,  in  its  broad  interpretation, 
may  mean  anything  movable. 

4.  Does  the  fact  that  the  merchandise  insured  is  described 
as  "principally  woolens,"  free  the  insuring  company  from  lia- 
bility in  this  case,  the  loss  being  on  machinery? 

Answer.  No.  "Principally"  does  not  limit  the  nature  of 
the  merchandise  to  woolens. 

5.  Does  the  fact  that  time  and  place  of  the  fire  are  both 
indeterminate  preclude  the  making  of  a  valid  claim? 

Answer.  No.  With  all  floating  policies  these  features 
are  necessarily  more  often  than  not  impossible  of  exact  deter- 
mination and  a  floating  form  of  policy  in  its  intent  clearly  admits 
this. 

6.  Does  the  fact  that  the  fire  was  caused  by  the  transport- 
ing railroad  carrying  extra  hazardous  articles  in  the  same  car 
with  the  insured  "merchandise"  void  the  insurance  policy 
and  does  it  give  the  said  insuring  company  the  right  to  demand 
subrogation  ? 

The  answer  to  this  must  be  that  under  the  policy  the  insur- 
ing company  is  holden  to  pay  the  loss  since  there  are  no  restric- 
tions in  the  form  as  to  the  method  or  association  of  carriage. 


150 

The  right  to  subrogate  the  railroad  by  the  insurance  com- 
pany in  this  case  when  they  have  paid  the  loss  under  their  policy 
is  clear.  Whether  they  can  collect  from  the  railroad  or  not 
will  all  depend  on  the  state  laws  governing  the  carriage  of  acids 
and  the  nature  of  the  contract  defined  on  the  receipt  given 
the  assured  by  the  railroad  on  the  latter  receiving  the  * 'mer- 
chandise." 

We  have  made  use  of  this  claim  and  the  questions  that 
arose  under  it  to  bring  to  your  attention  some  of  the  conditions 
that  arise  in  floating  policies  of  this  somewhat  indefinite  nature. 

Thus  far,  we  have  spoken  of  the  difficulties  that  confront 
the  framer  of  a  common  carrier  form  and  doubtless  you  are 
anxious  to  know  how  a  form  should  be  drafted  to  satisfactorily 
safeguard  such  difficulties  as  we  have  referred  to.  Some  of 
these  are  written  without  and  some  disclaiming  liability.  Good 
forms  illustrating  this  are : 

Common  Carrier  Liability  Form  When  Liability    is  not 

Disclaimed. 
Boston  &  Albany  Railroad  Co. 

"$ On  their  lebal  liability  in  or  for  all  merchandise  and/or 

baggage  and/or  freight  held  in  their  custody  as  common  carriers,  ware- 
housemen, wharfingers,  forwarders,  or  freighters;  also  upon  their  interest 
in  all  advances  or  other  charges  due  or  to  become  due  upon  all  mer- 
chandise and/or  baggage  and/or  freight  while  contained  in  their  wharf 
and  shed  adjacent  to  elevator  situated,  etc. 

"It  being  mutually  understood  and  agreed  that  if  claim  is  made 
against  the  assured  hereunder  for  merchandise  and/or  baggage  and/ 
freight  held  by  them  as  above  provided,  the  insurers  shall  have  the 
option  of  either  admitting  such  claim  for  payment  or  of  resisting  it  in 
court;  the  legal  expenses  incurred  in  such  resistance  to  be  borne  by  the 
insurance  companies  interested,  in  the  proportion  that  the  total  amount 
of  this  insurance  shall  bear  to  the  total  amount  of  such  claim  or  claims." 

Note  the  optional  feature  of  the  second  paragraph.  This 
is  inserted  because  so  frequently  a  common  carrier's  liability 
fire  policy  is  considered  as  covering  actual  property  damage  by 
fire.  True  it  is  that  the  damage  causing  the  claim  under  such 
a  policy  is  the  result  of  a  fire  loss;  but  the  subject  of  this  form 
of  insurance  is  not  the  property  in  the  custody  of  the  carrier, 
but  what  under  his  contract  as  a  carrier  he  is  obliged  to  make 
good  to  the  consignor  of  such  property  to  him. 

This  feature  is  often  overlooked  and  it  is  just  such  over- 
sight that  results  in  a  claim  being  made  like  the  one  we  have 
already  spoken  of  in  connection  with  the  A.  &  C.  railroad. 

By  the  use  of  the  words  in  the  carriers'  form  we  are  con- 
sidering, "the  insurers  shall  have  the  option  of  either  admitting 
such  claim  for  payment  or  of  resisting  it  in  Court,"  the  insuring 
company  admits  that  it  can,  if  it  so  elect,  (goverened  wholly 
by  circumstances)  pay  a  direct  fire  loss  for  goods  burned,  even 
should  such  loss  exceed  the  carrier's  liability  for  them. 


121 

This  is  a  large  hearted  form.  Instead  of  saying  definitely 
that  the  insurer  will  pay  for  a  certain  definite  thing  and  nothing 
else,  it  gives  him  the  option  of  doing  something  more.  It  removes 
his  best  weapon  of  defense;  it  throws  aside  the  barrier  that 
should  safeguard  him.  It  gives  the  claimant  the  right  to  ask 
for  more  than  he  paid  for.  Not  a  wholly  desirable  form  to  use. 
Optional  features  are  always  likely  to  lead  to  disagreements 
and  create  prejudice. 

To   prevent   such   conditions,   there   is   in   use   a   form   for 

Common  Carrier  Liability  when  Liability  is 
Disclaimed. 

Such  a  form  reads: 

Boston  &  Norfolk  Steamship  Co. 

"$— On  their  .legal  liability  in  or  for  all  merchandise  held  in 

their  custody  as  common  carriers,  warehouse  men,  wharfingers,  forwarders 
or  freighters;    while  contained  in  freight  shed,  situate,  etc. 

"The  purpose  of  this  insurance  is  to  indemnify  the  insured  for 
their  legal  liability,  if  any,  to  the  amount  they  are  obliged  to  pay  on  such 
merchandise  by  reason  of  loss  or  damage  by  fire,  and  it  is  understood  that 
liability  for  such  loss  or  damage  by  fire  is  and  will  be  disclaimed  in  bills 
of  lading,  shipping  receipts  and  other  similar  documents. 

"It  is  also  understood  and  agreed  that  all  claims  against  the  insured 
(provided  the  claim  or  claims  are  not  in  excess  of  the  amount  insured) 
shall  be  resisted  under  the  direction  and  control  of  this  Company,  the 
cost  of  such  resistance  (whether  conducted  by  the  insured  or  by  this 
Company)  to  be  paid  by  this  Company  in  the  proportion  that  the  amount 
of  this  policy  bears  to  the  total  amount  of  such  claim  or  claims. 

"In  the  event  of  loss  hereunder  this  Company  shall  be  subrogated 
to  all  claims  upon  owners  of  merchandise  to  the  extent  of  payment  made 
to  the  said  steamship  company." 

Under  this  form  the  insuring  company  can  only  pay  for 
carriers'  liability,  —  no  direct  merchandise  loss  is  admissible. 
It  fixes  the  limit  of  liberality  for  the  insurance  company  and 
the  limit  of  avarice  for  the  claimant.  It  is  a  wise  provision 
and  it  saves  dispute. 

Under  the  form  that  does  not  disclaim  further  liability 
the  right  of  subrogation  is  not,  in  fact  it  could  not  be,  asked. 
Under  the  form  that  does  disclaim  further  liability,  such  right 
of  subrogation  may  be  asked  and  you  will  note  that  it  is  incor- 
porated in  the  form. 

An  especial  safeguard  in  both  of  these  forms  is  the  use  of 
the  word  "Legal"  in  the  first  line.  This  confines  the  liability 
assumed  under  the  policy  to  just  what  the  carrier  is  beholden 
to  his  consignors  for  as  specified  by  his  receipt  or  contract  with 
the  latter,  and  should  prevent  the  said  consignor  from  looking 
to  the  carrier's  policy  as  a  source  from  which  to  collect  further 
loss  that  might  have  been  sustained. 


1S2 

Excess  Floater  Insurance. 

The  last  form  of  floater  of  which  I  want  to  speak  to  you 
at  this  time  is  that  used  with  excess  floater  insurance. 

The  design  of  insurance  of  this  form  is  to  make  good  the 
losses  that  may  come  to  an  insured  through  a  shortage  of  spe- 
cific insurance  at  some  location  where  he  may  have  insured 
property.  Such  excess  insurance  may  be  restricted  to  property 
in  one  place  or  it  may,  and  more  frequently  does,  cover  prop- 
erties moving  about  in  a  more  or  less  extended  area.  As  it  is 
usually  applied  to  insurance  on  floating  properties,  it  is  well 
to  discuss  it  here. 

Excess  insurance  is  that  taken  upon  any  subject  where  it 
is  expressly  stipulated  that  the  amount  specified  thereon  shall 
not  be  liable  for  any  loss  until  all  specific  insurance  upon  the 
subject  property  shall  have  been  exhausted.  If  the  specific 
insurance  is  adequate  to  pay  the  whole  loss,  then  the  excess 
insurance  does  not  apply. 

Policies  of  this  sort  whether  floating  or  not  are  desirable 
for  the  assured.  Their  especial  field  of  value,  though,  is  under 
the  floating  form.  Where  goods  are  liable  to  be  in  any  one  of 
a  number  of  locations  and  where  specific  insurance  is  carried 
on  them  in  each  one  of  these  locations,  the  time  may  arise  when, 
owing  to  a  congestion  of  these  goods  at  some  particular  place, 
the  specific  insurance  in  force  there  is  wholly  inadequate  to 
cover.  Should  a  loss  happen  at  such  a  time,  an  excess  floater 
would  come  in  and  further  indemnify  the  insured. 

The  form  for  such  a  policy  could  read: 

An  Excess  Floater  Form. 

"On   merchandise,   chiefly own,   or  held  by in  trust  or 

on  commission,  or  on  joint  account  with  others,  or  sold  but  not  removed, 
and  not  under  the  protection  of  a  Marine  PoHcy,  while  contained  in  all 
or  any  of  the  brick  or  stone  storage  warehouses  and  while  in  transit  in 

or  on  any  of  the  streets,  depots,  yards  or  wharves  in  the  City  of 

and  in  any  shop  or  vessel  in  the  port  of  said  city,  subject  to  the  following 
conditions:  — 


Reduced  Rate  Average  Clause. 

"In  consideration  of  the  reduced  rate  at  which  this  policy  is  written, 
it  is  expressly  stipulated  and  made  a  condition  of  this  contract  that  this 
company  shall  be  liable  for  no  greater  proportion  of  any  loss  than  the 
amount  hereby  insured  bears  to  the  actual  cash  value  of  the  property 
described  herein  at  the  time  when  such  loss  shall  happen,  nor  for  more 
than  the  proportion  which  this  policy  bears  to  the  total  insurance  thereon, 

"If  this  poHcy  be  divided  into  two  or  more  items,  the  foregoing 
conditions  shall  apply  to  each  item  separately;  and  if  two  or  more  build- 
ings or  their  contents  be  included  in  a  single  item,  the  application  of 
the  provision  as  to  special  inventory  or  appraisement  shall  be  limited 
to  each  building  and  its  contents. 


123 
Exception  Clause. 

"It  is  understood  and  agreed  that  goods  on  which  the  insured  have 
a  specific  insurance  are  not  covered  by  this  policy  except  so  far  only 
as  relates  to  any  excess  of  value  above  such  specific  insurance  and  that 
this  policy  shall  be  liable  only  for  its  proportion  of  any  loss,  on  such 
property,  which  exceeds  such  specific  insurance." 

Then  follow  paragraphs  excluding  certain  extra  hazardous 
properties  and  locations.  You  will  note  that  the  exception 
clause  defines  clearly  the  excess  feature  we  have  commented  on. 


Standard  Policy — Clauses  and  Forms 

FiftK  Pat)er 


BY 

WILLIAM  B.  MEDLICOTT 
Fire  Insurance  Clauses 


Clauses  of  Permission. 

Any  form  of  standard  policy  sets  forth  certain  conditions 
under  which  the  poHcy  contract  will  be  voided.  Some  of  these 
as  already  explained  are  conditions  that  could  not  rightfully 
be  waived,  while  there  are  others  which,  if  the  insurer  sees 
fit  to  do  so,  may  for  sufficient  reason  be  set  aside,  or  that  is, 
waived. 

Authority  to  waive  these  standard  provisions  is,  of  neces- 
sity, vested  in  all  the  local  or  commissioned  agents  of  the  fire 
insurance  companies,  unless  restrictions  have  been  placed  upon 
their  authority  and  are  inserted  in  either  the  application  for 
insurance  or  in  the  poUcy  itself,  or  in  some  other  manner,  have 
been  made  known  to  the  insured.  If  this  condition  is  not  made 
clearly  apparent  it  is  necessarily  assumed  that  the  commis- 
sioned agents  have  the  necessary  power  to  waive  conditions 
and  forfeitures,  and  to  stop  the  company  without  further  written 
permission  to  do  so.  This  conclusion  is  mainly  based  on  the 
extent  of  the  actual  authority  vested  in  such  agents'  commission 
of  authority  ordinarily  empowering  them  to  perform  such  acts 
as  the  accepting  or  the  rejecting  of  proposals  for  insurance, 
the  countersigning,  delivering,  renewing  or  cancelling  of  policies, 
the  granting  of  necessary  permits,  and  in  some  cases,  even 
fixing  of  the  premium  rate. 

Waiver  and  Estoppel. 

In  order  that  these  rights  of  waiver  and  estoppel  are  clearly 
understood,  let  us  seek  to  define  them.  Waiver  is  the  voluntary 
relinquishment  or  giving  up  of  some  known  right.  Estoppel 
is  the  bar  which  is  vested  in  equity  in  the  interests  of  fair  dealing, 
to  prevent  one  party  from  enforcing  to  the  disadvantage  of 
the  other,  certain  rights  which  he  appears  to  possess  under  the 
letter  of  the  contract.  When  by  its  declarations,  agreement 
or  conduct,  it  has  induced  the  other  party  to  believe  that  such 


125 

rights  have  been  relinquished,  then  an  estoppel  raises  what 
we  have  termed,  the  bar,  to  prevent  the  rights  of  the  party  who 
would  otherwise  suffer  from  being  encroached  upon.  Waiver 
being  the  voluntary  abandonment  of  a  right,  estoppel  can 
only  include  such  cases  where  an  abandonment  is  inferred  or 
imposed  by  the  Court  from  the  nature  of  the  conduct  of  the 
party  who  would  otherwise  be  entitled  to  the  right.  Waiver 
rests  upon  knowledge  of  the  right  and  an  intention  to  abandon 
it  by,  in  the  case  of  an  insurance  policy,  the  party  issuing  the 
contract,  that  is  the  insurer.  Estoppel  rests  upon  misleading 
conduct  by  one  party  to  the  prejudice  of  the  other,  and  is  forced 
upon  the  would-be  wrongdoer  by  the  Court  in  order  to  prevent 
fraud,  either  actual  or  constructed. 

In  studying  "Clauses  of  Permission"  it  is  more  important 
for  us  to  consider  the  intent  and  the  rights  granted  by  waivers 
rather  than  to  give  attention  to  what  might  constitute  an 
estoppel. 

Silence  by  Insurer  Not  Necessarily  a  Voidance  of 
His  Rights. 

The  mere  fact  of  nothing  being  said  by  a  company  after 
knowledge  of  a  forfeiture  of  the  policy  by  the  assured,  or  the 
commission  of  some  act  that  would  appear  to  create  a  voidance 
of  the  policy,  will  not,  in  general,  operate  as  a  waiver.  That  is, 
since  the  company  has  not  contracted  to  search  out  the  insured 
under  its  poHcies  and  advise  them  as  to  the  legal  effect  of  the 
policy  provisions,  the  fact  that  they  have  not  advised  the  insured 
of  the  way  in  which  they  regard  the  consequences  of  his  act, 
would  not  constitute  a  waiver  of  their  rights  resulting  from  a 
voidance  of  the  policy  by  the  violation  of  some  one  or  more 
of  its  provisions  by  the  assured.  We  speak  of  this  because, 
at  times,  the  claim  is  made,  where  a  loss  occurs  under  a  policy 
owing  to  the  introduction  of  some  extra  hazardous  material 
or  process  into  the  property  covered,  that  the  company  or  its 
representative  never  told  the  assured  that  they  must  not  create 
this  condition  of  extra  hazard,  and  that  since  nothing  was 
said  about  it,  the  assured  inferred  that  he  had  a  perfect  right 
to  do  as  he  pleased.  In  a  case  like  this,  the  fact  that  the  company 
had  given  no  advice  does  not  constitute  a  waiver  of  the  rights 
and  safeguards  that  were  granted  it  (the  insuring  company) 
under  the  provisions  of  the  policy. 

Does  a  Voidance  Permanently  Destroy  the  Contract? 

It  is  interesting  in  this  connection  to  consider  whether 
the  temporary  voidance  of  a  policy,  owing  to  the  insured  party 
having  committed  some  act  expressly  prohibited  in  the  policy 
contract,  kills  the  poHcy.     This  is  a  question  that  has  been  the 


126 

subject  of  considerable  dispute,  it  being  maintained  in  some 
cases  that  if,  for  example,  by  the  introduction  of  some  extra 
hazardous  and  prohibited  material  or  process  into  a  property, 
the  policy  conditions  were  violated  and  the  contract  voided, 
whether,  if  this  hazardous  material  or  process  was  later  on  re- 
moved from  the  building,  the  policy  automatically  again  became 
operative,  that  is,  was  revived  and  made  a  live  contract.  I 
do  not  find  that  there  has  ever  been  any  definite  ruling  on  this 
point  that  would  govern  all  cases.  Apparently,  if  the  insurers 
recognized  the  policy  after  such  an  act  of  voidance,  as  being  a 
live  contract,  such  recognition  would  make  it  so.  In  any  event 
it  seems  to  have  been  regarded  as  a  very  inadequate  defense 
for  a  company  to  set  up  that  the  policy  was  void  because  there 
was  on  the  premises,  for  illustration,  some  prohibited  article 
stored  prior  to  a  fire  that  created  a  claim,  even  though  the 
origin  of  the  fire  may  have  been  wholly  foreign  to  the  existence 
of  the  prohibited  article.  Evidence  of  knowledge  on  the  part 
of  the  insuring  company  of  the  presence  of  these  prohibitive 
conditions  is  the  feature  that  must  mainly  determine  the  final 
ruling.  If,  knowing  the  increase  of  hazard,  they  allowed  the 
policy  to  continue  and  took  no  steps  to  cancel  the  contract, 
it  is  only  fair  to  assume  that  such  contract  is  still  in  force. 

We  have  spoken  in  this  general  manner  of  waivers,  in  order 
to  direct  the  view  that  you  will  be  called  on  to  take  of  them  in 
connection  with  clauses  that  permit  the  setting  aside  of  any  of 
the  standard  policy  provisions. 

Certain  Policy  Provisions  Cannot  be  Waived. 

You  have  already  been  told  that  there  are  certain  clauses 
that  cannot  be  waived.  Parties  to  a  contract  of  insurance 
within  a  certain  state  cannot  waive  the  provisions  of  a  general 
statute  of  that  state  unless  the  statute  authorizes  their  doing 
so.  For  example,  the  rule  requiring  an  insurable  interest  as 
one  of  the  conditions  of  the  fire  insurance  contract,  whether 
it  is  prescribed  by  a  special  statute  or  not,  being  adopted  out 
of  regard  for  the  welfare  of  the  state  may  not  be  waived  by  the 
parties  to  the  insurance  contract.  A  corporation  cannot  do 
an  act  that  is  beyond  the  corporate  powers  vested  in  it  by  its 
charter  and  every  one  dealing  with  the  corporation  is  assumed 
to  be  aware  of  the  nature  and  extent  of  such  power.  If  a  fire 
insurance  company  organized  in  Massachusetts  to  do  a  fire 
business,  should  attempt  to  make  a  contract  in  life  or  ocean 
marine  insurance,  the  contract  would  be  void  because  the  com- 
pany was  attempting  to  do  something  that  implied  the  existence 
of  rights  and  powers  not  vested  in  it  by  its  Massachusetts 
charter.  There  are  other  features  of  the  fire  insurance  policy 
which  cannot  be  waived,  but  our  attention  must  be  directed 
more  particularly  to  those  that  can,  since  it  is  to  this  latter 
class  of  conditions  that  clauses  of  permission  especially  apply. 


127 

We  have  called  attention  to  these  provisions  that  cannot  be 
set  aside  by  waiver  in  order  to  cause  you  to  think  of  the  rights 
that  may,  or  may  not,  exist  when  you  are  considering  the  setting 
aside  of  any  of  the  poHcy  conditions,  rather  than  to  give  definite 
instruction. 


What  Policy  Provisions  Can  Be  Waived. 

What  can  be  waived?  Any  condition  or  provision  of  the 
policy  that  is  inserted  for  the  benefit  of  the  insuring  company, 
even  stipulations  which  appear  to  provide  that  there  shall  be 
no  waiver,  or  that  no  waiver  shall  be  made  except  in  a  special 
manner,  as  by  writing,  or  that  certain  classes  of  persons  shall 
be  deemed  to  have  no  authority  to  waive,  may  be  waived  by 
the  insurers  through  such  representatives  of  theirs  as  have  the 
requisite  authority.  This  may  seem  strange  and  somewhat 
one  sided,  but  it  is '  rightfully  assumed  and  granted  that  the 
party  who  has  the  right  to  make  a  contract  should  also  have 
the  power  to  alter  it  to  any  extent  they  may  wish  unless  restricted 
by  statute,  provided  the  insured  party  approves  and  accepts. 

Since  under  these  conditions  the  rights  that  are  waived  are 
all  of  them  set  aside  for  the  benefit  of  the  insured  party,  objec- 
tion on  his  part  is  a  very  remote  condition. 

The  fact  that  by  the  attachment  of  permissible  clauses 
rights  that  would  otherwise  exist  for  the  benefit  of  one  party 
or  the  other  can  be  waived,  carries  with  it  the  importance  of 
the  insured  party  knowing  exactly  what  there  is  in  these  waivers 
of  certain  features  of  the  policy  contract.  It  is  not  only  essen- 
tial for  the  safeguarding  of  the  insured  that  he  should  see  to 
it  that  the  standard  form  of  policy  used  is  the  correct  and  duly 
authorized  one,  and  that  the  description  of  his  property  is  clear 
and  unmistakable,  but  he  should  also  scrutinize  most  closely 
the  clauses  that  may  be  attached,  especially  those  constituting 
waivers,  for  while  the  majority  of  such  clauses  tend  to  remove 
rights  more  directly  beneficiaf  to  the  insurer,  there  are  those 
that  often  are  used  that  may  take  away  or  materially  reduce 
his  own  rights. 

What  provisions  of  the  standard  policy  contract,  then,  do 
clauses  of  permission  especially  affect?  You  will  agree,  I  am 
sure,  that  they  apply  particularly  to  what  are  termed  the  void- 
ance  clauses,  that  is  those  conditions  under  which  the  standard 
contract  states  "That  this  entire  policy  shall  be  void  if,"  and 
then  follow  a  number  of  defined  conditions. 

The  New  York  or  Connecticut  and  the  Massachusetts 
standard  poHcies,  in  the  main,  agree  as  to  just  what  these  void- 
ances  are,  and  the  comments  that  we  purpose  making  on  them 
are  appUcable  to  either  form  of  policy,  excepting  in  the  one 
or  two  instances  to  which  we  purpose  calling  attention. 


128 

WiTHOLDING  OF  MATERIAL  FaCTS. 

You  will  note  that  the  Massachusetts  standard  form  states 
that  this  policy  shall  be  void  "If  any  material  fact  or  circum- 
stance, stated  in  writing,  has  not  been  fairly  represented  by 
the  assured."  It  hardly  seems  possible  that  any  underwriter 
would  desire  to  waive  any  of  the  conditions  of  this  provision. 
Doubtless,  an  underwriter  would  not,  but  unfortunately  many 
of  the  assured  and  some  brokers,  have  sought  to  set  aside  the 
safeguard  imposed  on  the  ground  that  unintentionally  and  in 
a  most  innocent  manner,  an  ignorant  assured  might  misrep- 
resent in  taking  out  his  insurance  and  thereby  void  his  claim 
in  the  event  of  a  loss  occurring.  It  is  very  interesting  to  note 
in  this  connection  that  it  is  not  the  ignorant  assured  that  raises 
this  issue,  or  that  seems  to  desire  to  have  the  effect  of  their 
ignorance  diverted  from  them  in  the  manner  suggested,  but 
it  is  always  a  suggestion  of  those,  who  not  only  are  far  from 
ignorant,  but  who  would  greatly  resent  any  imputation  that 
they  were.  It  is  hard  to  understand  how  the  public  statutes 
of  any  state  could  seek  to  waive  this  provision,  since  by  so 
doing  they  virtually  compound  a  possible  felony  and  are  legal- 
izing what  would  often  prove  a  fraud,  but  it  is  a  fact  that  one 
of  the  southern  states  has  especially  provided  that  under 
certain  conditions,  the  companies  must  waive  their  rights  to 
claim  forfeitures  on  account  of  misrepresentation  of  facts  at 
the  time  the  insurance  was  taken  out. 

Concealment  or  Misrepresentation. 

The  New  York  form  of  policy  is  very  much  more  explicit 
in  its  reference  to  this  feature  and  states  that  the  entire  policy 
shall  be  void  "If  the  insured  has  concealed  or  misrepresented 
in  writing  or  otherwise,  any  material  fact  or  circumstance  con- 
cerning this  insurance  or  the  subject  thereof,  or  if  the  interest 
of  the  insured  in  the  property  be  not  truly  stated  therein.  Or, 
in  case  of  any  fraud  or  false  swearing  by  the  insured  touching 
any  matter  relating  to  this  insurance  or  the  subject  thereof, 
whether  before  or  after  a  loss."  It  certainly  would  seem  as 
if  this  description  as  to  what  will  constitute  a  voidance,  was  so 
clear  as  to  admit  of  no  possible  doubt.  So  much  latitude, 
though,  has  been  given  by  the  Courts  in  their  interpretation 
of  this  provision  that,  unfortunately,  it  has  to  a  large  extent, 
become  a  dead  letter. 

There  can  be  no  question  but  what  any  clause  or  rider 
attached  to  a  policy  that  would  in  any  degree  limit  the  condi- 
tions of  this  provision,  would  be  most  unwise  and  wholly  uncalled 
for,  and  would  be  rigidly  objected  to. 


129 

Other  Instances. 

The  next  of  the  voidance  clauses  is  "or,  if  the  assured  now 
has  or  shall  hereafter  make  any  other  insurance  on  the  said 
property  without  the  assent  in  writing  or  in  print,  of  the  com- 
pany." The  voidance  of  this  provision,  which  in  its  intent  is 
a  perfectly  proper  and  wise  one,  but  which,  however,  may  be 
rightfully  waived,  is  accomplished  by  the  simple  insertion  of 
the  words  under  the  description  of  the  property  "other  insurance 
permitted."  The  reason  for  the  insertion  of  this  phrase  in 
the  standard  policy  is  that  is  establishes  a  check  to  the  over 
insurance  of  the  property,  and  it,  doubtless,  was  inserted  by 
law  makers  who  realized  the  tendency  of  the  average  jury  to 
be  over  liberal  in  the  estimate  of  the  amount  and  value  of  prop- 
erties. The  presence  of  this  clause  calls  attention  to  this  con- 
dition, and  if  the  company  feels  that  the  amount  of  its  own 
policy  is  sufficient  with  respect  to  the  value  of  the  property, 
it  reserves  to  it  the  right  to  refuse  to  attach  the  other  "insurance 
permitted"  clause,  which  would  grant  practically  an  unlimited 
amount.  Doubtless,  too,  this  provision  to  a  certain  extent 
reduces  the  temptation  to  bring  about  an  opportune  fire  that 
might  present  itself  to  unscrupulous  insureds. 

Removal  of  Insured  Property. 

The  policy  will  be  void  "If  without  consent  of  the  company, 
the  property  insured  shall  be  removed,  except  that  if  such  removal 
shall  be  necessary  for  the  preservation  of  the  property  from 
fire,  this  policy  shall  be  valid  without  such  assent  for  five  days 
thereafter."  Since  the  average  insurance  policy  insures  a  certain 
party  against  loss  or  damage  to  a  certain  specified  thing  in  a 
certain  defined  place,  removal  of  the  insured  property  would 
virtually  call  for  the  issuing  of  an  entirely  .new  contract,  or  the 
reformation  of  the  policy  by  endorsement  permitting  the  re- 
moval. If  any  waiver  of  this  feature  of  the  policy  is  granted, 
it  is  usually  in  the  nature  of  a  floating  form  which  contemplates 
insuring  the  property  in  any  location  within  certain  more 
or  less  widely  defined  limits,  such  conditions  as  we  considered 
under  tourists'  and  carriers'  policies. 

An  Increase  of  Risk. 

Or,  if  without  consent  of  the  company  the  situation  or 
circumstances  affecting  the  risk  shall  by  or  with  the  knowledge, 
advice,  agency  or  consent  of  the  insured,  be  so  altered  as  to 
cause  an  increase  of  such  risks.  The  New  York  form  sums  up 
the  situation  by  also  inserting  the  words,  "Or,  if  the  hazard 
be  increased  by  any  means  within  the  control  or  knowledge 
of  the  insured."  but  the  whole  object  of  either  the  Massachu- 
setts or  the  New  York  provision  is  to  prevent  changes  being 


130 

created  by  the  insured  in  his  property  that  may  constitute 
an  increase  of  hazard,  without  the  insuring  company  being 
advised  thereof  and  given  opportunity  to  withdraw.  There 
are  a  number  of  clauses  of  permission  designed  to  meet  the  con- 
ditions of  this  poUcy  provision,  such  as  permission  to  effect 
other  than  ordinary  alterations  or  repaii-s,  builder's  risk  permits, 
mechanic's  permits,  and  in  fact,  the  number  of  special  provi- 
sions for  conditions  out  of  the  ordinary  that  may  be  allowed 
by  clauses  of  permission,  designed  to  offset  this  especial  safe- 
guarding feature  of  the  policy,  are  many  and  varied. 

Sold  or  Assigned. 

Passing  on  in  the  list  of  conditions  that  void  the  policy, 
we  find  the  Massachusetts  form  states  that  the  .policy  shall 
be  void,  "If  the  property  covered  shall  be  sold  or  the  policy 
assigned."  It  hardly  seems  necessary  to  comment  on  this  pro- 
vision when  we  remember  that  it  is  people,  not  things,  that 
we  insure,  and  if  a  certain  property  against  the  loss  of  which 
an  insurance  company  has  agreed  to  indemnify  the  insured 
party,  ceases  to  belong  to  that  party,  the  contract  must  at  once 
become  invalid  and  the  only  way  to  recognize  that  the  insur- 
ance taken  out  shall  follow  the  property  will  be  by  the  attach- 
ment of  an  endorsement  to  the  policy  admitting  of  change  in 
ownership.  A  clause  granting  this  privilege  is,  perhaps,  more 
properly  one  of  title  than  of  permission,  though  it  is  true  that 
permission  is  granted  by  the  endorsement  for  a  change  in  the 
party  protected  thereby. 

The  Alienation  Clause. 

The  New  York,  policy  is  even  more  explicit  and  defines 
that  the  policy  shall  be  void  unless  the  interest  of  the  insured 
is  that  of  "sole  and  unconditional  ownership."  Also  the  New 
York  policy  embodies  what  is  termed  the  alienation  clause, 
which  states  that  the  poHcy  shall  be  void  'Tf  any  change  other 
than  by  the  death  of  an  insured  takes  place  in  the  interest, 
title  or  possession  of  the  subject  of  insurance  (except  change 
of  occupants  without  increase  of  hazard)  whether  by  legal 
process,  or  judgment,  or  by  voluntary  act  of  the  insured,  or 
otherwise."  The  provision  embraced  in  this  clause  is  of  the 
highest  importance  to  the  insuring  company,  but  at  the  same 
time  it  furnishes  a  frequent  cause  of  misunderstanding  to  an 
ignorant  or  careless  assured.  The  insurance  companies  cer- 
tainly have  the  right  to  know  who  they  are  contracting  with, 
and  it  would  be  wholly  wrong  if  any  new  party  could  be  intro- 
duced in  the  contract  without  their  consent.  Nor,  you  will 
note,  under  the  alienation  clause  can  the  insured  alter  the  risk. 


131 

The  Massachusetts  standard  poHcy  being  much  less  expUcit 
regarding  this  feature,  does  not  require,  as  a  rule,  any  clause 
or  provision  bearing  upon  it,  other  than  that  which  may  form 
a  part  of  the  ordinary  endorsement  relative  to  change  in  owner- 
ship or  occupancy. 

The  same  restrictions  apply  to  the  assignment  of  the  policy, 
and  such  assignments  are,  as  you  know,  effected  by  an  endorse- 
ment that  must  be  assented  to  by  the  insuring  company  in  order 
to  continue  the  policy  contract  in  force.  This  is  another  out- 
come of  the  personal  indemnity  feature  of  the  insurance  con- 
tract, and  involves  the  universal  principle  that  no  new  party 
can  pose  as  an  assured  under  an  insurance  policy  without  the 
consent  of  the  insurer. 

Vacancy  and  Non  Occupancy. 

The  next  voidance  condition  is  that  of  vacancy,  the  standard 
form  stating  that  the  policy  will  be  void  *Tf  the  premises  hereby 
insured  shall  become  vacant  by  the  removal  of  the  owner  or 
occupant,  and  shall  remain  vacant  for  more  than  thirty  days 
after  such  assent."  The  New  York  form  is  a  little  more  explicit 
in  this,  using  the  words  "vacant  or  unoccupied"  instead  of  simply 
the  word  "vacant."  Furthermore,  the  term  limit  is  reduced 
to  ten  days  under  the  New  York  standard  form.  The  reason 
for  the  addition  of  this  word  "unoccupied"  is  to  give  the  restric- 
tion a  broader  effect  in  order  to  more  thoroughly  safeguard  the 
insuring  company.  Technicalities  in  interpretation  have  so 
crept  into  the  decisions  rendered  on  insurance  contracts  that 
it  has  even  been  held  that  a  building  was  not  vacant  so  long 
as  there  was  any  air  in  it.  We  may  say  that  this  is  absurd,  but 
at  the  same  time,  it  is  a  fact,  and  I  have  before  me  a  list  of 
upwards  of  twenty  decisions  that  practically  sustain  that  inter- 
pretation. Why  unoccupancy  should  not  call  for  an  equal 
application  of  the  saving  grace  of  common  sense  in  its  inter- 
pretation, I  cannot  say,  but  it  does  not  seem  to  have  been 
subject  to  quite  the  same  amount  of  foolishness  as  the  inter- 
pretation of  the  word  "vacant."  The  reason  we  speak  of  this 
condition  is  because  so-called  vacancy  clauses,  are  ones  of  great 
importance  and  distinctly  come  under  the  sarne  class  that  we 
are  now  considering,  namely,  clauses  of  permission.  In  order 
to  properly  draft  and  apply  these  clauses  it  must  be  essential 
for  us  to  know  what  constitutes  vacancy  or  unoccupancy. 
In  the  case  of  a  dwelling,  it  would  meet  all  the  requirements  of 
the  poHcy  provision  if  someone  is  habitually  living  and  sleeping 
there,  even  though  he  was  not  constantly  on  the  premises. 
On  the  other  hand,  it  has  been  held  and  sustained,  that  to 
constitute  an  occupied  dweUing  house  it  was  not  essential 
that  it  be  the  sleeping  place  of  so'me  party,  and  that  presence 
in  the  dwelling  of  anyone  at  more  or  less  irregular  intervals 


132 

and  for  even  very  brief  periods  of  time,  so  long  as  they  were 
present  at  periods  within  the  term  of  hmitation,  would  con- 
stitute an  occupancy  that  would  render  the  vacancy  permit 
unnecessary.  You  will  note  that  in  the  Massachusetts  form 
the  mention  of  vacancy  is  followed  by  the  words  "By  the  re- 
moval of  the  owner  or  occupant,"  and  the  insertion  of  this 
word  "removal"  seems  to  still  further  complicate  the  situation 
for  in  a  neighboring  state  where  the  standard  policy  has  a  clause 
almost  precisely  like  that  in  the  Massachusetts  form,  the  occu- 
pant of  a  house  on  account  of  the  state  of  her  health  left  her 
home  unoccupied  for  a  period  of  three  months,  taking  with  her 
only  her  clothing.  She  left  with  the  understanding  that  someone 
was  to  visit  the  premises  in  the  daytime  at  least  twice  a  week. 
A  fire  occurred  and  the  admission  of  the  claim  being  the  subject 
of  controversy  the  Court  held  that  there  is  a  difference  in  mean- 
ing between  "absence"  and  "removal"  and  left  it  to  the  jury 
to  say  whether  the  house  was  "vacant  by  removal." 

With  these  somewhat  conflicting  opinions  as  to  just  what 
the  vacancy  clauses  in  the  standard  policies  do  really  mean,  it 
is  somewhat  difficult  to  determine  just  how  a  clause  should 
be  worded  that  will  permit  further  vacancy  or  unoccupancy 
than  that  allowed  by  the  policy,  and  at  the  same  time,  properly 
safeguard  the  interests  of  the  insuring  company.  The  tendency 
seems  to  be  growing  for  the  insured  to  place  himself  on  the  safe 
side  by  the  adoption  of  the  so-called  unlimited  vacancy  permit. 
There  can  be  no  question  but  what  permission  of  this  kind  is 
allowable  if  the  company  sees  fit  to  grant  it,  but  it  often  results 
in  the  occurrence  of  losses  that  are  a  great  surprise  to  the  com- 
pany that  finds  itself  paying  a  claim  on  what  may  have  been 
for  some  time  past,  a  practically  abandoned  property. 

Operating  Over  Time. 

Coupled  with  this  provision  of  voidance  in  the  Massachu- 
setts policy  is  the  statement  that  if  the  subject  of  the  insurance 
"Be  a  manufacturing  establishment  running  in  whole  or  in  part 
extra  time,  except  that  such  establishment  may  run  in  whole 
or  in  part  extra  hours,  not  later  than  nine  o'clock  P.  M.,  or  if 
such  establishments  shall  cease  operation  for  more  than  thirty 
days  without  permission  in  writing  endorsed  hereon."  Clauses 
granting  permission  for  both  the  over  time  and  the  cease  opera- 
tion feature,  are  perfectly  admissible  if  the  company  elect  to 
grant  them,  and  the  clauses  that  are  ordinarily  in  use  to  meet 
this  need  are  both  regular  and  generally  acceptable.  It  is 
questioned,  sometimes,  as  to  whether  there  is  any  increase  in 
hazard  or  not,  when  a  manufacturing  establishment  is  running 
nights,  or  when  it  is  entirely  shut  down  for  a  more  or  less  extended 
period.  Experience  has  shown  that  hazard  does  increase, 
owing  to  various  physical  causes,  such  as  over-heated  bearings. 


133 

the  presence  of  fewer  operatives  and  the  consequent  delay  in 
the  detection  of  a  fire,  and  in  the  cease  operations  case,  the 
possible  introduction  of  moral  hazard  and  the  less  close  super- 
vision that  a  property  of  this  character  naturally  obtains.  This 
calls  for  the  attachment  to  the  clause  of  a  guarantee  as  to  care 
and  supervision  —  a  guarantee,  which  though  necessary,  often 
proves  ineffectual. 

Attempt  to  Defraud. 

It  is  somewhat  surprising  that  in  the  arrangement  of  the 
voidance  conditions  in  the  Massachusetts  poHcy,  there  is  inter- 
jected between  the  permit  to  cease  operations  and  the  prohibi- 
tion as  to  the  keeping  of  certain  extra  hazardous  articles,  that 
there  should  be  the  proviso  stating  that  the  policy  should  be 
void  "If  the  insured  shall  make  any  attempt  to  defraud  the 
company,  either  before  or  after,  the  loss."  It  would  seem  as 
if  that  proviso  should  have  been  made  at  the  outset,  or  if  brought 
in,  in  connection  with  any  of  the  other  voidances,  that  it  should 
have  accompanied  the  first  of  the  mentioned  voidances,  that  is, 
those  of  misrepresentation.  The  framing  of  a  clause  to  exempt 
the  assured  from  the  voidance  of  his  policy  if  he  has  been  guilty 
of  fraud  in  connection  therewith,  is  something  that  we,  fortu- 
nately, in  this  part  of  the  country  do  not  have  to  consider, 
but  the  way  that  insurance  legislation  has  been  going  in  some 
of  our  western  and  southern  states,  it  is  not  unlikely  that  fraud 
might,  when  perpetrated  in  connection  with  a  fire  insurance 
policy,  be  elevated  from  the  ranks  of  crime  to  those  of  virtue. 

Dangerous  Materials. 

Probably  the  most  important  of  all  of  the  clauses,  and  the 
ones  that  are  called  the  most  frequently  into  use,  are  those 
that  are  drafted  to  meet  the  last  of  the  requirements  of  this 
portion  of  the  Massachusetts  policy.  Those  that  state  that 
the  poHcy  shall  be  void  if  gun  powder  or  certain  other  hazardous 
articles  mentioned  are  kept  in  any  manner  deviating  from  that 
allowed  or  prescribed  by  law,  or  that  if  certain  volatile  products 
grouped  usually  under  the  general  name  of  "gasoline,"  shall 
be  kept  on  the  premises  insured. 

The  enormous  increase  in  the  use  of  the  so-called  volatile 
products,  has  necessitated  the  almost  constant  attachment 
of  clauses  permitting  some  one  or  the  other  of  them  to  be  kept 
and  used  under  constantly  varying  conditions.  The  New  York 
form  of  policy,  in  some  ways,  is  more  satisfactory  in  dealing 
with  this  question  than  is  that  of  Massachusetts,  for  it  does  not 
recognize  the  fact  as  averting  a  voidance,  that  usuage  or  custom 
of  trade  in  connection  with  the  business  carried  on  in  insured 
premises  will  waive  the  provision  of  the  poHcy,  which  states 


134 

that  such  pohcy  shah  be  void  if  these  hazardous  materials  are 
kept.  This  renders  it  seemingly  more  necessary  to  have  the  clause 
of  permission  that  grants  the  keeping  or  using  of  these  so-called 
gasoline  products,  much  more  clearly  defined  under  the  New 
York  policy  than  under  that  of  Massachusetts,  though  I  do 
not  find  that  there  is  any  material  difference  in  the  phraseology 
of  the  forms  currently  used  under  each  of  these  policies. 

The  increasing  use  of  automobiles  has  introduced  another 
feature  of  this  gasolene  hazard,  and  one  that  is  nowadays 
ever  with  us.  This  has  resulted  in  the  combining  in  one  clause 
of  the  permission  to  keep,  under  certain  conditions,  gasoline 
products  and  to  permit  also,  the  presence  of  the  automobile 
in  connection  with  which  they  are  used.  This  gasoline  feature 
raises  the  somewhat  interesting  question  as  to  whether,  in  the 
written  description  of  a  property,  the  mention  of  the  presence 
of  these  extra  hazardous  materials  will,  by  itself,  waive  the 
policy  provision  prohibiting  them,  or  whether  it  is  not  necessary 
to  have  a  distinct  clause  calling  attention  to  the  presence  of 
these  dangerous  substances  and  prescribing  the  conditions 
under  which  they  may  be  kept  in  the  insured  premises.  Some- 
times the  courts  have  held  that  wherever  these  prohibited  articles 
might  naturally  or  usually,  belong  to  a  stock  of  goods  or  other 
subject  matter  insured,  that  it  is  not  necessary  to  further  grant 
permit  for  their  use,  but  such  decisions  are  by  no  means  absolute 
or  unexceptional,  and  the  only  truly  safe  course  to  pursue  is 
to  attach  the  regular  clause  of  permission  that  will  meet  the 
special  condition  of  the  case. 

Damage  by  Lightning. 

No  mention  is  made  in  the  Massachusetts  form  as  to  the 
attitude  of  the  standard  policy  with  respect  to  loss  by  lightning, 
leaving  it,  therefore,  to  be  distinctly  assumed  that  fire  resulting 
from  lightning  is  covered  by  the  poHcy.  This  would  exclude 
the  damage  that  might  be  caused  by  lightning,  other  than  that 
which  might  come  from  a  resulting  fire.  The  New  York  form 
of  policy  places  this  question  beyond  doubt  and  states  that 
"liability  for  direct "  damage  by  lightning  may  be  assumed  by 
specific  agreement  hereon."  It  is  this  proviso  that  has  given 
rise  to  the  use  of  the  so-called  lightning  clause,  which  is  not, 
as  so  many  people  seem  to  think,  necessary  to  enable  them 
to  collect  for  the  fire  damage  that  may  result  from  a  stroke  of 
lightning,  but  its  object  is  to  make  the  policy  also  cover  the 
wreckage  or  water  damage,  that  may  result  from  a  lightning 
stroke  in  cases  where  a  fire  does  not  ensue. 


135 

Special  Voidance  Conditions. 

There  are  certain  special  conditions  brought  into  the  New- 
York  poHcy  that,  while  their  recognition  may  call  for  .the  use 
of  permissive  clauses,  are  still  ones  that  can,  perhaps,  be  more 
properly  considered  under  the  topic  of  "clauses  to  meet  special 
conditions,"  than  for  us  to  dwell  on  them  here.  I  refer  to  those 
exemptions  from  liability  for  loss  that  may  be  caused  by  inva- 
sion, insurrection,  riot,  civil  war,  military  or  usurped  power, 
neglect,  explosion,  fallen  buildings,  and  in  some  of  our  states, 
earthquake.  Permissive  clauses  to  recognize  hazards  resulting 
from  such  sources  are,  in  the  case  of  some  of  these  causes,  at 
least  admissible  and  will  be  the  subject  for  consideration  later  on. 

Leased  Land. 

Another  of  the  special  conditions  that  the  New  York  policy 
recognizes  as  constituting  voidance,  which  Massachusetts 
overlooks  although  it  is  one  of  the  points  that  the  careful  under- 
writer always  considers,  is  that  of  the  leased  land  feature  in 
cases  where  the  subject  of  insurance  stands  upon  land  held  in 
that  manner.  The  New  York  policy  distinctly  states  that  the 
policy  will  be  void  "If  the  subject  of  the  insurance  be  a  building 
on  ground  not  owned  by  the  insured."  Massachusetts,  doubt- 
less, regards  the  withholding  of  information  of  this  sort  as  being 
one  of  the  material  facts  that  should  be  presented  at  the  time 
the  insurance  was  applied  for,  but  it  is  a  good  plan  to  have 
attention  especially  called  to  it  in  the  manner  that  the  New 
York  form  of  policy  does.  The  clause  safeguarding  the  assured 
in  the  event  of  a  condition  of  this  sort,  while  it  is  a  permissive 
clause,  is  usually  incorporated  directly  with  the  form  of  property 
description,  and  states  after  defining  the  property,  that  it  is 
situated  on  leased  land,  located  so  and  so. 

Standard  Clause  Essential  to  Safety. 

So  much  for  the  conditions  that  arise  under .  the  two  most 
widely  used  forms  of  standard  policy  calling  for  the  attach- 
ment of  permissive  clauses.  As  to  the  phraseology  of  such 
clauses,  it  seems  to  me,  those  that  are  prescribed  by  the  National 
Board  give  us  as  desirable  standards  to  work  from  as  any,  and 
uniformity  in  this  respect  is  greatly  to  be  desired.  Remember 
that  clauses  are  only  needed  where  the  waiving  of  some  of  the 
provisions  of  the  standard  poHcy  are  required,  and  remember 
what  we  said  in  an  earlier  lecture,  that  since  the  standard  policy 
was  an  instrument  devised  by  the  very  best  of  underwriting 
and  legal  talent,  that  it  is  unwise  to  attempt  to  amend  it  unless 
conditions  absolutely  require  it,  and  then  only  within  carefully 
defined  limits.  Clauses  are  in  every  way  fully  as  important 
as  forms,  and  the  same  care  in  drawing  them  and  in  seeing  to 


136 

it  that  they  are  so  worded  as  to  do  away  with  every  possible 
doubt  as  to  their  real  meaning,  should  be  followed  as  in  the  de- 
scribing of  properties,  or  locations,  or  kind  of  liabiHty  covered. 
Illustrations  of  clauses  to  meet  the  conditions  we  have 
been  speaking  of,  are  the  following : 

Removal  Permit. 

"Permission  is  hereby  given  during  the  period  of  thirty  days  from 
date  hereof  to  remove  the  property  insured  under  this  poHcy  from  44 
South  Main  Street  to  brick  building,  No.  815  Wabash  Avenue,  Chicago. 

"It  is  understood  and  agreed  that  during  such  removal  this  policy 
shall  attach  in  both  locations  in  proportion  as  the  value  of  the  property 
insured  in  each  bears  to  such  value  in  both  localities,  that  from  and  after 
the  expiration  of  said  thirty  days  and  prior  thereto,  if  the  removal  shall 
have  been  completed,  this  policy  shall  attach  in  the  new  location  only, 
and  the  effect  of  the  average  clause  be  discontinued,  and  that  additional 
premium  pro  rata  of  increase  in  rate,  if  any,  in  the  new  location  shall 
be  paid  within  thirty  days  from  this  date." 

Mechanic's  Permit. 

a     Builder's  Risk. 

"$ Builder's  risk  on  the  story  '...  building,  with 

roof   in    course   of   construction,    including    material    on    ground 

immediately  adjacent  thereto,  situated 

"Doors  and  windows  to  be  closed  and  locked  every  night,  and  on 
Sundays  and  holidays,  and  shavings  to  be  thoroughly  cleaned  out  at 
least  once  a  week.  Smoking  and  fire  prohibited  in  or  around  said  building 
except  fire  in  plumber's  or  tinner's  pots.  Such  pots  to  be  taken  out 
of  building  every  night." 

(Note.  —  This  may  be  used  for  either  owner  or  builder.) 

"When  policy  is  issued  to  owner  of  building  under  construction 
this  form  fully  protects  him,  but  when  policy  is  issued  to  the  contractor 
or  builder,  let  the  policy  be  drawn  in  favor  of  either  (or  both)  by  name, 
and  add  always  'To  cover  his  (or  their)  interest.'  If  the  owner  makes 
partial  payments  as  building  progresses,  then  the  policy  should  be  issued 
in  the  name  of  both  owner  and  builder  to  prevent  legal  complications 
and  secure  prompt  payment  of  loss." 

b     Ordinary  Mechanics'  Permit. 

"In    consideration    of   $ additional   premium    paid    therefor, 

and  the  warranty  by  the  insured  that  no  paint  or  similar  substance  shall 
be  removed  by  burning  in  or  upon  the  premises  insured  (or  containing 
the  property  insured)  without  the  consent  of  this  company  indorsed  on 
this  policy,   permission  is  hereby  given  for  mechanics  to   work  in  and 

about  said  premises  for months  from  date,  to  make  alterations, 

additions  or  repairs,  and  this  policy  (so  far  as  it  applies  on  building) 
shall  also  cover  all  materials  and  supplies  therefor,  therein  or  adjacent, 
and  said  alterations  or  additions  when  completed." 

(Note.  —  This  also  covers  building  materials  and  supplies  even 
though  not  yet  a  part  of  the  building.) 

c     Special  Mechanics'  Permit. 

"Builders'   risk   for   two   months   on    the   two-story   frame   dwelling 

house,  in  course  of  erection,  situate .     No  fire  to  be  allowed  in 

said  building  except  for  heating  glue  in  the  kitchen  fireplace.  Doors  and 
windows  to  be  closed  and  locked  at  night,  and  shavings  to  be  thoroughly 
cleaned  out  once  a  week." 


137 

(Note.  —  This  form  may  be  used  with  slight  modification  to  cover 
additions  or  alterations  to  an  already  existing  building;  to  vary  the 
term  of  permission  or  to  include  a  charge  for  such  permission.) 

d     Demolition  Permit. 

"In   consideration   of   S additional  premium,   this   company 

under  this  policy  shall,  in  case  of  fire,  be  liable  also  for  the  loss  or  damage 
occasioned  by  the  enforcement  of  any  state  law  or  city  ordinance  which 
necessitates,  in  rebuilding,  the  demoHtion  of  any  portion  of  the  insured 
building  not  damaged  by  fire,  but  not  beyond  the  actual  value,  prior 
to  the  fire,  of  the  property  subject  to  such  demolition  and  not  for  any 
expense  of  greater  cost  of  reconstruction;  provided  that  in  no  event 
shall  this  company  be  liable  under  this  policy  beyond  the  sum  for  which 
it  is  issued,  and  provided,  further,  that  this  company  shall  be  liable  only 
for  such  proportion  of  the  loss  or  damage  as  the  amount  hereby  insured 
bears  to  the  whole  amount  insured  thereon,  whether  such  other  insurance 
contains  a  similar  clause  or  not." 

e  Improvement  or  Betterment  Permit. 

"In  the  event  of  fire  causing  loss  or  damage  to  assured's  improve- 
ments, additions,  stairways,  ceilings,  passageways,  decorations  or  other 
betterments  to  leased  building,  or  to  machinery  or  fixtures  installed  therein 
at  the  expense  of  assured,  the  same  shall  be  adjusted  with  and  paid  to 
the  assured  without  refercDce  to  or  contribution  from  insurance  on  the 
buildings.  The  intention  of  this  policy  is  to  place  the  insured,  in  the  event 
of  loss,  in  the  position  of  that  of  absolute  owner  of  said  improvements, 
fixtures  and  machinery." 

(Note.  —  While  this  permit  is  one  that  is  not  often  used,  it  will 
avoid  the  opportunity  for  dispute  that  sometimes  arises  with  owners 
of  partly  burned  properties.) 

Vacancy  Permit. 

Clauses  waiving  voidance  under  this  condition  are  many 
and  varied,  ranging  from  the  broad,  unlimited  Boston  form 
to  the  restrictive  permission  used  in  the  South,  reading: 

"Permission  is  hereby  given  that  the  premises  herein  described 
may  remain  vacant  or  unoccupied  between  occupants  during  the  entire 
term  of  this  policy. 

"And  in  consideration  of  the  increased  hazard,  by  reason  of  such 
vacancy,  it  is  hereby  understood  and  agreed,  that  during  such  vacancy 
and  in  lieu  of  an  extra  charge  therefor,  one-third  of  the  amount  of  the 
insurance  hereunder  shall  be  and  is  suspended  and  of  no  effect;  and, 
during  the  vacancy  hereby  consented  to,  the  amount  of  this  policy  is 
•reduced  to  dollars  (being  two-thirds  of  original  amount  of  in- 
surance.) .  .,     ,     1    11 

"Provided,  that  when  the  premises  herein  described  shall  again 
become  occupied,  the  amount  of  this  poHcy  shall  be  restored  to  the  amount 
as  at  the  date  of  this  indorsement." 

Any  of  these  forms  may  be  subject  to  time  limitations, 
to  additional  premiums,  or  to  stipulations  regarding  supervision 
of  premises. 

Unoccupancy  Permits. 

Clauses  granting  this  privilege  can  be  very  brief  and  simply 

read  as  follows :  •    •      •    v      u 

"In  consideration  of  $..- extra  premium,  permission  is  hereby 

given  for  the  property  insured  under  this  policy  to  remain  unoccupied 
for  a  period  of  from  to  


138 

Usually  some  stipulation  as  to  care  and  supervision  of  the 
property  follows  this. 

Cease  Operation  Permit. 

A  clause  granting  this  privilege  in  a  manufacturing  plant 
will  read  as  the  unoccupancy  permit  just  quoted,  except  that 
the  word  "idle"  takes  the  place  of  "unoccupied,"  and  a  clause 
guaranteeing  continuous  watchman's  service  should  be  invariably 
required. 

Overtime  or  Extra  Hour  Permits. 

Clauses  similar  in  arrangement  to  cease  operation  permits, 
but  defining  the  extra  hours  for  which  the  privilege  is  granted, 
are  applicable  to  this  condition. 

Gasoline,  etc..  Permits. 

Standard  clauses  designed  to  permit,  and  at  the  same  time, 
to  safeguard  the  storage  or  use  of  hazardous  articles  of  the  above 
class,  are  almost  innumerable.  I  would  refer  you  to  the  following 
adopted  by  the  National  Board  of  Fire  Underwriters,  as  showing 
what  may  be  granted  along  these  lines  and  what  restrictions 
or  warranties  should  form  a  part  of  such  permits. 
Standard   Form. 

No.  15.  Permits  for  buildings  and  contents  when  automo- 
biles using  gasoline  are  kept  or  stored. 

No.   16.     Permit  for  use  of  a  gasoline  engine. 

No.  17.  Permit  for  use  of  a  gas  machine,  with  outside 
carbureter. 

No.  18.  Permit  for  use  of  a  gas  machine,  with  inside 
carbureter. 

No.  19.  Permit  for  the  use  of  gasoline  lighting  systems 
having  outside  tanks  and  inside  flame  heated  generators. 

No.  22.  Permit  for  the  use  of  gasoline  lighting  systems 
having  inside  tanks  and  inside  flame  heated  generators. 

No.  20.     Permit  for  the  use  of  fuel  oil. 

Features  necessary  for  safe  underwriting  in  the  granting 
of  these  permits  are  brought  out  in  them  and  suggest  what 
must  be  required  and  guaranteed  in  the  granting  of  such  per- 
mission. These  safety  requirements  are  more  matters  of  insur- 
ance engineering  and  chemical  hazard  than  of  economics. 


btandard  Policy — Clauses  and  Forms 
Sixth  Pat)er 

BY 

WILLIAM  B.  MEDLICOTT 

Clauses  of  ExemJ)tion  and  of  Warrant 

Glauses  of  Title  ana  Insurable  Interest 

Glauses  for  oj)ecial  Emergencies 

The  various  clauses  which  it  is  our  purpose  to  discuss  at 
this  time,  are  divided,  you  will  note,  into  three  general  classes 
each  of  which  is  capable  of  more  or  less  sub-division.  Taking 
them  in  the  order  I  have  mentioned,  I  would  ask  you  to  consider 
first  the  clauses  that  I  have  termed  as  being  those  of  * 'exemption 
and  of  warrant." 

Clauses  of  Exemption. 

Clauses  of  this  nature  are  ones  that  are  used  to  exclude 
conditions  that  materially  affect  the  hazard,  and  which  are 
determining  factors  in  arriving  at  the  rate  charged  for  insurance 
on  the  property  involved.  While  the  property  covered  is  the 
same  with  or  without  the  attachment  of  clauses  of  this  nature, 
there  are  under  certain  conditions,  extra  features  of  hazard 
involved,  of  which  if  no  mention  was  made  or  against  which 
no  exemption  was  taken,  would  legitimately  be  included  under 
the  policy  as  being  insured  against  no  matter  what  was  the 
origin  of  the  fire  and  whether  these  extra  hazardous  features 
w^ere  the  cause  of  it  or  not. 

Spontaneous  Combustion. 

One  of  the  best  illustrations  of  conditions  of  this  sort  is 
that  of  the  familiar  spontaneous  combustion  clause,  a  clause 
which  you  know  is  quite  generally  adopted  in  the  insuring  of 
bituminous  coal  or  structures  containing  the  same.  While 
bituminous  coal  is  subject  to  serious  damage  from  fire  that 
may  originate  through  ordinary  or  external  causes,  it  is  also 
specially  liable  to  fire  from  spontaneous  combustion  which  care- 
lessness in  the  handUng  or  storing  of  it  may  cause  to  become 
a  very  present  and  serious  menace  to  the  coal  itself  and  to  the 


140 

surrounding  property.  Danger  from  loss  of  this  character  can, 
with  proper  care  and  watchfulness  almost  always  be  guarded 
against  and  prevented.  On  the  other  hand,  carelessness  on 
the  part  of  the  coal  operator  may  cause,  through  the  likelihood 
of  spontaneous  combustion,  an  undue  amount  of  extra  hazard. 
Realizing  this,  properties  of  this  character  are  ordinarily  rated 
in  two  ways.  There  is  the  rate  on  the  coal  yard  or  coal  pocket 
itself  and  its  contents,  with  no  mention  of  any  exemption,  and 
there  is  an  alternative  and  much  lower  rate  that  can  be  used 
if  the  policy  distinctly  states  that  in  consideration  of  this  lower 
rate,  it  is  understood  and  agreed  that  the  insuring  company 
is  not  liable  for  loss  that  may  be  caused  by  the  spontaneous 
combustion  of  bituminous  coal  on  the  assured's  premises. 
Without  such  a  clause,  as  we  have  described,  loss  from  this 
special  and  constant  danger  is  fully  insured  against,  and  smce 
the  risk  of  loss  from  this  cause  is  such  an  eminent  one,  the  hazard 
assumed  by  the  insuring  company  is  vastly  increased.  This 
is  but  one  of  the  clauses  of  exemption.  In  it,  the  exemption 
exists  in  the  agreement  that  claims  will  not  be  made  for  losses 
resulting  from  spontaneous  fire  in  the  coal. 

The  ordinary  and  simple  form  of  clause  ordinarily  used 
in  providing  this  exemption  from  spontaneous  combustion 
liability ;   is  worded  substantially  as  follows : 

"In  consideration  of  the  reduced  rate  at  which  this  pohcy  is  written, 
it  is  mutually  understood  and  agreed  that  this  company  is  not  liable  for 
loss  occasioned  by  the  spontaneous  combustion  of  bituminous  coal  on 
the  premises  of  the  assured." 

Since  we  have  by  this  illustration  shown  in  a  general  way 
the  purpose  and  working  of  a  clause  of  exemption,  it  may  be 
interesting  for  us  to  follow  out  the  idea  a  little  more  fully,  and 
since  certain  features  of  marine  insurance  illustrate  these  condi- 
tions more  clearly,  we  may  with  profit,  dwell  on  the  workings 
of  this  extra  hazard,  as  illustrated  by  marine  insurance. 

Attitude  of  Marine  Policy. 

Fire  in  ships  may  arise  from  a  variety  of  causes,  from  light- 
ning; spontaneous  combustion  of  the  cargo;  negligence  of  the 
officers,  or  crew  of  the  ship;  from  the  acts  of  enemies;  or  even 
the  precautionary  means  that  sometimes  are  taken  where  a 
vessel  is  burned  by  municipal  authority  to  avoid  danger  of  infec- 
tion from  some  contageous  disease.  Now,  under  the  ordinary 
policy,  in  such  cases,  the  insuring  company  is  liable  for  loss 
occasioned  by  fire,  whether  its  origin  is  explainable,  or  whether 
it  can  properly  be  assigned  to  either  one  of  the  above  mentioned 
causes,  or  some  other  cause  akin  to  them,  with  the  exception 
of  combustion  generated  through  some  inherent  defect  in  the 
subject  insured,  that  is  the  cargo  of  the  vessel,  or  because  such 
cargo  was  shipped  in  a  dangerous  or  damaged  state.  If  however, 
the  cargo  was  properly  defined  and  was  in  perfect  condition 


141 

at  the  time  of  the  shipment,  and  later  on  combustion  resulted 
from  the  entrance  of  sea  water  upon  said  cargo  and  its  effect 
on  the  same,  it  would  be  covered  by  the  policy.  In  cases  where 
certain  goods  were  insured  and  fire  originated  in  them  under 
either  of  the  conditions  just  described  and  such  fire  extended 
to  other  goods,  or  to  the  ship  itself,  the  insurance  on  such  other 
goods  is  responsible  for  the  fire  loss  to  them  and  the  insurance 
on  the  ship  could  be  held  to  pay  the  damage  sustained  by  it. 

We  have  cited  this  condition  of  fire  loss  under  marine  insur- 
ance as  illustrating  one  feature  that  may  be  considered  in  con- 
nection with  spontaneous  combustion.  If  certain  goods  were 
damaged  by  a  fire  originating  from  spontaneous  combustion 
in  some  exposing  property,  it  would  be  wholly  immaterial 
whether  the  properties  affected  by  this  exposing  fire  were  subject 
to  the  provision  of  the  spontaneous  combustion  clause  or  not, 
and  even  the  fact  that  the  property  in  which  the  fire  originated 
carried  insurance  excluding  damage  from  spontaneous  combus- 
tion, would  not  relieve  the  companies  insuring  the  exposing 
damaged  property  from  liability.  As  we  stated  in  our  earlier 
comments  on  these  'clauses  of  exemption,  they  are  designed 
not  only  to  eliminate  the  consequences  of  certain  severe  hazards 
for  the  insurance  company,  but  also,  by  their  attachment  to 
the  policy,  to  effect  a  very  material  saving  in  the  cost  of  insur- 
ance to  the  insured.  Exemption  clauses  are  wise,  since  they 
impose  on  the  insured  the  necessity  of  his  exercising  proper 
care  and  supervision,  which  will  almost  invariably  save  him 
from  losses  that  without  such  supervision,  are  likely  to  occur. 

Consequential  Damage. 

Another  proper  field  for  the  operation  of  clauses  of  exemp- 
tion, is  the  one  that  is  broadly  termed  "Consequential  Damage" 
and  in  no  better  way  can  this  be  brought  to  your  minds  than  by 
the  use  of  another  familiar  illustration.  Cold  storage  plants 
are  almost  invariably  written  with  clauses  of  this  character. 
Unusually  in  cold  storage  warehouses  the  low  temperature  that 
has  to  be  maintained  for  the  preservation  of  perishable  mer- 
chandise (generally  food  stuffs  of  some  sort  or  other)  is  produced 
by  a  refrigerating  plant.  Such  damage  by  fire  as  might  render 
the  machinery  of  this  refrigerating  plant  unable  to  operate, 
would  result  almost  immediately  in  a  rapid  rise  in  temperature 
in  the  cold  storage  warerooms,  and  a  consequent  damage  or 
total  spoiling  of  the  perishable  contents. 

Cold  Storage  Insurance. 

If  insurance  is  written  on  the  contents  of  a  cold  storage 
warehouse  simply  describing  the  property  insured,  and  the  loca- 
tion in  which  it  is  insured  and  makes  no  mention  of  this  conse- 


142 

quential  damage,  a  loss  resulting  from  a  fire  would  find  the  insur- 
ance company  liable,  even  though  the  fire  itself  did  not  reach 
the  stored  merchandise,  but  on  account  of  the  crippling  of  the 
refrigerating  plant,  had  caused  the  destruction  of  the  insured 
property  through  increased  temperature.  If  on  the  other 
hand,  the  clause  exempting  from  consequential  damage  was 
attached  and  the  fire  crippled  the  refrigerating  plant  and  the 
merchandise  was  spoiled  in  consequence,  there  would  be  no 
liability  attaching  to  the  company. 

This  provision  is  a  wise  one  for  just  the  same  reason  that 
we  have  mentioned  in  connection  with  the  spontaneous  combus- 
tion clause.  A  refrigerating  plant  should  be  so  constructed  and 
arranged,  and  more  than  all,  so  supervised  as  to  render  its 
destruction  by  fire  extremely  unlikely,  and  the  care  necessary 
to  prevent  such  destruction  on  the  part  of  the  cold  storage 
warehouse  men  is  one  that  it  is  not  only  proper,  but  fully  encum- 
bent upon  them  to  exercise.  Looking  at  it  from  the  viewpoint 
of  the  insurance  companies,  absence  of  this  clause  of  exemption 
leaves  them  open  to  a  very  severe  loss  from  a  fire,  that  not  only 
is  usually  avoidable  through  proper  care,  but  also  one  that  may 
have  been  very  trifling  in  the  extent  of  the  actual  and  direct 
fire  damage  which  it  caused.  Many  companies  refuse  to  write 
cold  storage  merchandise  without  the  attachment  of  this  clause, 
and  their  position  is  an  eminently  proper  one.  The  same  ques- 
tions which  we  raised  relative  to  the  effect  on  the  rate  by  the 
combustion  clause  are  applicable  to  the  consequential  damage 
feature.  A  clause  covering  conditions  of  this  latter  sort  might 
properly  read : 

"This  clause  to  be  attached  to  all  policies  covering  on  merchandise, 
stocks  or  products  in  houses  artificially  cooled,  other  than  solely  by 
the  storage  of  ice. 

"Notice  is  hereby  given,  that  it  is  understood  and  agreed,  that  the 
insurance  under  this  policy  does  not  extend  in  its  application  to  cover, 
and  this  company  shall  not  be  liable  for,  any  indirect  or  consequential 
loss  or  damage,  including  loss  or  damage  caused  by  change  of  temperature 
resulting  from,  occasioned,  or  caused  by  the  total  or  partial  destruction 
by  fire  of  the  refrigerating  or  cooling  apparatus,  connections  or  supply 
pipes,  nor  by  the  interruption  of  the  refrigerating  or  cooling  processes 
from  any  cause." 

You  will  note  that  this  is  purely  a  clause  of  exemption  and 
not  of  warrant  since  the  assured  does  not  agree  under  it, .  to 
maintain  any  special  supervision,  process  or  device  for  the 
safeguarding  of  his  property,  but  simply  accepts  the  insurance 
with  a  definite  understanding  that  it  does  not  cover  indirect 
or  consequential  damage  resulting  from  injury  to  the  refrig- 
erating or  cooling  apparatus. 


143 

Greenhouse  Insurance. 

Another  good  illustration  of  the  consequential  damage  fea- 
ture, and  one  where  the  physical  conditions  are  just  reversed 
from  those  that  we  have  cited,  is  that  of  greenhouse  insurance. 
In  winter  weather  the  preservation  of  the  contents  of  a  green- 
house is  of  course,  absolutely  dependent  on  the  heating  system 
employed  to  maintain  the  proper  teniperature  for  the  Hfe  and 
growth  of  the  plants.  Damage  to  the  so-called  "head  house" 
or  heating  plant  of  the  system  might,  as  the  result  of  a  very 
small  fire,  cause  an  entire  shut-down  of  the  heating  plant, 
producing  a  drop  in  temperature  in  the  greenhouses  themselves 
and  as  a  result  a  lot  of  frozen  vegetation.  Consequently  this 
hazard,  which  should  be  regarded  in  just  the  same  way  by 
the  assured  that  the  refrigerating  plant  fire  should  be  and 
which  should  be  constantly  guarded  against,  is  assumed  prop- 
erly by  the  assured  himself.  By  changing  the  words,  "refrig- 
erating or  cooling"  to  "heating  and  circulating"  in  the  form 
cited  for  cold  storage  plants,  we  have  a  proper  greenhouse 
consequental  damage  exemption  clause. 

Since  consequential  damage  clauses  apply  almost  wholly 
to  contents  rather  than  to  buildings,  it  can  readily  be  seen  that 
the  opportunity  to  get  rid  of  an  undesirable  or  unsalable  stock 
is  a  very  tempting  one,  because  a  small  fire  that  only  tempo- 
rarily crippled  and  injured  the  warehouse  or  the  greenhouse, 
would  accomplish  it.  There  is  no  easier  way  to  dispose  of  a 
stock  of  bad  eggs  that  the  owner  of  the  cold  storage  plant  has 
discovered  form  a  material  part  of  the  contents  of  his  plant, 
than  to  have  a  small  fire  in  the  refrigerating  building  that  would 
allow  the  temperature  to  rise  to  the  spoihng  point  in  the  store- 
room and  then  to  make  it  appear  that  it  was  this  circumstance 
and  not  one  that  previously  existed,  that  actually  caused  the 
deterioration  of  the  stock  in  question. 

Fortunately  perhaps,  from  this  viewpoint  of  cold  storage 
insurance,  the  owners  and  operators  of  the  plant  are  usually 
different  parties  from  those  directly  owning  and  insuring  the 
contents,  although  not  infrequently  we  find  them  to  be  the  same 
persons. 

Clauses  of  Warrant. 

Clauses  of  warrant  are  ones  that  are  appHcable  to  those 
cases  where  special  hazards  of  occupancy  or  equipment  are 
assumed  under  the  poHcy,  with  the  understanding  and  agree- 
ment that  losses  from  the  ever  present  and  exceptional  risks 
associated  with  them,  are  fully  covered,  provided  that  in  con- 
nection with  these  hazardous  but  permitted  articles  or  devices, 
certain  safeguarding  methods  are  to  be  followed  in  connection 
with  them.  The  disposition  of  this  feature  is  not  left  in  doubt. 
It  is  clearly  stated  as  to  just  what  the  treatment  shall  be.    You 


144 

can  readily  see  that  a  clause  of  this  najture  is  one  that  has  to 
be  very  decidedly  taken  into  account  in  the  determining  of  a  rate. 

Acetylene  Permits. 

A  good  illustration  of  clauses  of  this  nature  is  what  is 
known  as  the  "acetylene  gas  permit  of  warrant,"  and  such  a 
form  reads :  • 

"In  consideration  of  the  following  warranties  on  the  part  of  the 
assured,  permission  is  hereby  granted,  when  not  in  violation  of  any  re- 
striction imposed  by  law,  to  use  acetylene  gas  on  the  premises  described 

in  this  policy,  generated  by Acetylene  Gas  Machine,  manufactured 

by  ,  at  provided  the  machine  is  contained  in  a  separate 

and  independent  building  located  and  constructed  as  per  specifications 
printed  on  the  back  of  this  permit. 

"The  use  of  liquid  acetylene  or  gas  generated  therefrom  on  the  pre- 
mises described  herein  is  absolutely  prohibited." 

The  permission  granted  under  this  form  refers  to  the  use  of  one 
of  the  most  dangerous  compounds  ever  introduced  to  the  public, 
and  one  which  should  only  be  tolerated  under  severe  restric- 
tions. Therefore,  a  clause  such  as  I  have,  just  quoted,  is  always 
accompanied  by  a  set  of  warrants  and  cautions,  the  warrants 
stating  how  the  acetylene  generator  and  the  calcium  carbide 
used  in  it,  shall  be  cared  for  and  the  cautions  being  matters 
of  an  educational  nature  relative  to  the  special  hazards  of  the 
acetylene. 

These  cautions  are  more  matters  of  insurance  engineering 
and  the  chemistry  of  fire  hazards  than  of  economics,  and  we 
will  not  discuss  them  here. 

It  is  extremely  important  however,  that  there  be  attached 
to  the  policy  as  a  part  of  the  clause,  these  warranties  and  cau- 
tions, for  they  thereby  become  a  part  of  the  contract  and  vio- 
lation of  them  materially  weakens  the  position  of  the  assured, 
and  further  safeguards  the  insuring  company.  In  fact,  since 
the  warrants  are  essentially  a  part  of  the  contract,  any  viola- 
tion of  them  practically  constitutes  a  voidance  of  the  policy. 

Gasolene  Permits. 

Much  the  same  conditions  exist  in  the  case  of  printers  and 
other  parties  who  are  likely  to  use  benzine  or  similar  cleaning 
compounds  in  connection  with  their  business.  Ordinarily, 
in  rating  properties  of  this  sort  quite  a  material  advance  is  made 
for  the  assumption  that  there  must  be  cleaning  materials  of 
this  nature  in  the  plant.  Where,  however,  the  assured  feels 
that  he  can,  and  is  willing  to  dispense  with  the  use  of  them  he 
is  able  to  effect  a  considerable  saving  in  the  cost  of  his  insur- 
ance by  the  attachment  of  a  clause  warranting  that  such  mater- 
ials shall  not  be  used  or  kept  by  him  during  the  life  of  the  policy. 
Such  a  clause  of  warranty  is  the  following: 

"Warranted  by  the  assured  that  no  benzine,  gasoline,  mineral 
turpentine,  naphtha  or  other  product  of  petroleum,  except  refined  coal 
oil  of  lawful  test,  shall  be  used  or  kept  on  the  premises  during  the  life  of 
this  policy." 


145 

The  greatly  extended  use  of  automobiles  and  the  provi- 
sions that  it  has  been  necessary  to  prescribe  as  to  the  way  in 
which  they  shall  be  kept,  housed  and  cared  for,  have  called  for 
warranty  clauses  defining  and  making  a  part  of  the  contract 
the  restrictions  for  safety  which  it  has  been  deemed  advisable 
to  impose.  Since  it  is  these  same  gasolene  or  benzine  features 
that  are  the  ones  of  special  hazard  in  connection  with  automo- 
biles, the  clauses  of  warrant  are  ones  defining  the  methods 
used  for  filling  and  caring  for  the  machines,  and  also  limiting 
the  quantity  of  gasolene  that  there  may  be  in  the  insured  premises 
at  any  one  time.  Clauses  of  this  nature  affect  more  generally 
the  policies  that  are  written  to  cover  on  the  containing  building 
rather  than  on  the  car  itself,  but  they  would  be  equally  appli- 
cable to  lines  of  fire  insurance  written  covering  the  automobile 
specifically.  Since  in  insuring  automobiles  it  is  generally  de- 
sired to  have  one  policy  cover  all  classes  of  mishaps  to  which 
they  may  possibly  be  subjected,  and  since  the  marine  form  of 
policy  the  more  readily  admits  of  all  of  these  conditions,  direct 
insurance  on  automobiles  is  generally  of  the  marine  rather 
than  of  the  straight  fi're  type. 

The  special  feature  of  warrant  that  we  wish  to  impress 
here  is  that  the  warranty  clause  or  rider  attached  to  the  policy 
which  grants  permission  for  either  the  storage  or  the  use  of  any 
of  the  hazardous  materials  referred  to  shall  at  the  same  time, 
be  restrictive  in  its  nature  and  shall  define  clearly  the  condi- 
tions under  which  such  hazardous  materials  shall  be  kept  and 
used.  In  the  event  of  a  loss  then,  the  fact  that  these  restrictions 
and  warrants  are  a  part  of  the  contract,  gives  the  strongest 
sort  of  a  defense  in  the  event  of  a  loss  occurring  from  a  fire 
directly  attributable  to  a  non-compliance  with  the  warranty 
conditions. 

Some  Other  Warranties. 

Another  class  of  warranties  may  be  illustrated  by  a  clause 
like  the  following : 

"It  is  a  condition  of  this  policy  and  a  warranty  on  the  part  of  the 
assured  that  the  dwelHng  above  described  shall  be  occupied  by  the  owner 
and  his  family,  and  if  occupied  by  any  other  party  this  policy  shall  be 
void  and  of  no  effect." 

In  this,  you  will  note  that  the  owner  of  the  insured  dwelling 
agrees  that  the  dwelling  against  the  loss  of  which  he  is  insured, 
shall  be  occupied  by  himself  and  if  he  fails  so  to  occupy  it  and 
rents,  leases  or  permits  its  occupancy  by  any  other  party,  the 
insurance  immediately  becomes  void. 

Th^  clauses  of  warrant  that  are  used  in  automatic  sprinkler 
insurance  further  illustrate  this  warranty  feature  that  we  are 
speaking  of.    A  form  used  for  this  purpose  is  the  following: 

"In  consideration  of  the  reduced  rate  of  premium  granted  on  the 
above  described  premises  by  the  Underwriters  Association  of  New  York 


146 

State  for  the  introduction  of  Automatic  Sprinklers  therein,  it  is  hereby 
made  a  part  of  this  policy  that  the  assured  (if  the  owner  of  the  realty, 
or  if,  being  a  tenant,  in  control  of  the  sprinkler  equipment)  shall  maintain 
said  Automatic  Sprinkler  System  in  good  working  order  during  the  life 
of  this  insurance,  and  that  no  change  shall  be  made  in  said  Sprinkler 
Equipment  or  the  water  supply  therefor  without  having  first  obtained 
the  consent  and  approval  of  the  said  Underwriters'  Association  of  New 
York  State." 

This  form  we  have  already  alluded  to  in  speaking  of  auto- 
matic sprinkler  insurance,  but  it  is  interesting  to  note  at  this 
point  the  special  v^arranty  feature  embodied.  You  see  that  the 
clause  begins  with  the  words  "In  consideration  of  the  reduced 
rate,  etc."  This  is  always  a  wise  provision  in  the  framing  of 
any  warranty  clause  since  it  plays  the  same  part  in  the  condi- 
tions of  the  contract  as  do  the  words  "value  received"  which 
are  customarily  used  on  promisory  notes,  or  *Tn  consideration 

of Dollars"  that  is  commonly  used  as  the  opening 

phrase  in  a  deed,  or  bill  of  sale.  It  recognizes  that  there  has 
been  a  consideration  between  the  parties  and  that  in  the  case 
of  an  insurance  policy  the  requirements  are  not  made  by  the 
insurer  without  a  consideration  being  given  therefore.  In  this 
way  the  terms  of  the  contract  are  very  materially  strengthened. 

You  will  also  note,  referring  again  to  this  sprinkler  warranty 
that  the  assured  or  whoever  is  in  control  of  the  sprinkler  equip- 
ment, agrees  to  maintain  said  equipment  in  good  working  order 
and  to  make  no  change  in  its  arrangement  or  effectiveness, 
without  obtaining  previous  consent  from  the  proper  parties. 

Still  another  form  of  warranty  clause  appears  in  what  is 
called  the  "general  sprinkler  guarantee,"  a  form  that  is  espe- 
cially applicable  in  places  where  official  inspection  of  sprinkler 
equipments  is  both  difficult  and  infrequent.  A  form  to  meet 
such  conditions  is  the  following: 

"This  policy  having  been  issued  at  a  reduced  rate  of  premium  on 
account  of  the  installation  of  an  Automatic  Sprinkler  Equipment  in  the 
premises  described  it  is  hereby  made  a  condition  of  this  policy  that  the 
assured  shall  use  due  diligence  to  maintain  such  Automatic  Sprinkler 
System,  in  good  working  order  during  the  life  of  this  policy." 

This  clause  in  addition  to  naming  the  consideration  granted 
(that  of  reduced  rate)  includes  a  promise  by  the  assured  to  use 
due  diligence  to  maintain  the  sprinkler  equipment  in  good  work- 
ing order  during  the  life  of  the  policy. 

While  due  diligence  is  a  pretty  difficult  thing  to  clearly 
define,  and  a  still  more  difficult  thing  to  prove  the  non-existence 
of  in  event  of  a  loss  a  clause  like  this  acts  to  quite  an  extent  as 
a  safeguard  and  in  some  instances,  as  a  defense  against  losses 
that  are  directly  due  to  the  assured 's  own  carelessness  and 
neglect,  and  his  going  back  on  his  pledge  and  at  the  same  time 
violating  a  provision  of  the  standard  policy  contract. 


147 

Electric  Warranties. 

We  would  also  call  your  attention  to  the  warranties  that 
are  commonly  used  in  connection  with  electrical  equipments. 
In  these  clauses  not  only  is  permission  given  to  use  electricity 
for  lighting  or  other  purposes,  but  accompanying  this  per- 
mission is  a  warranty  on  the  part  of  the  assured  as  to  the  nature 
of  the  installation  of  the  electrical  equipment,  and  also  a  pledge 
as  to  the  way  in  which  it  shall  be  maintained. 

The  Important  Feature  of  Warranties  and  Exemptions. 

The  all-important  thing  to  bear  in  mind  in  connection  with 
any  of  these  clauses  of  exemption  and  warrant  is  to  see  to  it 
that  they  are  so  worded  that  they  not  only  become  an  actual 
part  of  the  contract  itself,  but  that  they  define  clearly  what 
is  allowed,  to  what  extent  it  is  allowed,  and  the  conditions 
guaranteed  to  be  maintained  on  account  of  its  allowance.  Of 
course  restrictions  of  this  sort  relate  only  to  those  material 
devices  or  processes  that  the  voidance  provisions  of-  the  policy 
cite  as  a  cause  for  the  immediate  nullifying  of  the  contract  of 
insurance. 

Clauses  of  Title  and  Insurable  Interest. 

Under  this  topic  your  attention  is  directed  to  clauses  that 
are  frequently  used  recognizing  other  interests  than  those  of 
sole  and  unconditional  ownership.  Also  clauses  stating  if  the 
subject  of  insurance  be  a  building,  that  it  is  located  on  leased 
land  (if  such  is  the  case),  and  also  clauses  which  may  grant  any 
different  right,  or  rights,  of  subrogation  than  those  that  are 
especially  outlined  in  the  body  of  the  policy  or  that  may  waive 
this  right.  The  provisions  of  the  New  York  standard  form  of 
policy  call  for  greater  explicitness  in  clauses  of  this  nature  than 
do  those  that  form  a  part  of  the  Massachusetts  standard. 

Massachusetts  Policy  Provisions. 

The  latter  form  you  will  note,  states  that  the  policy,  "shall 
be  void  if  any  material  fact  or  circumstance,  stated  in  writing 
has  not  been  fairly  represented  by  the  assured."  Further  than 
that  there  is  no  restriction  as  to  the  presence  of  mortgages 
or  liens  of  any  kind  on  the  property,  or  to  the  fact  that  the  build- 
ing (if  the  subject  of  the  insurance  be  a  building)  is  standing 
on  land  owned  by  someone  other  than  the  owner  of  the  building 
itself. 

In  the  event  of  a  loss  occurring  where  any  of  these  condi- 
tions exist  and  where  the  policy  contract  in  use  is  of  the  Massa- 
chusetts form,  it  always  raises  a  question  in  the  event  of  a  dis- 
pute arising  as  to  the  validity  of  the  claim  under  this  provision, 


148 

as  to  whether  in  the  particular  case  under  consideration,  the 
withholding  of  the  information  as  to  a  mortgage  or  a  lien,  or 
leased  land  was  a  material  fact  or  circumstance,  and  if  the 
Court  should  decide  that  it  was  not,  and  that  it  created  no 
increase  of  hazard,  there  usually  can  be  no  successful  defense 
set  up. 

New  York  Policy  Provisions. 

Turning  to  the  New  York  standard  form  we  find  these 
provisions  of  the  poHcy  very  much  more  clearly  defined.  For 
example,  the  policy  will  be  void  "If  the  interest  of  the  insured 
be  other  than  unconditional  and  sole  ownership,  or  if  the  subject 
of  insurance  be  a  building  on  ground  not  owned  by  the  insured 
in  fee  simple,  or  if  the  subject  of  insurance  be  personal  property, 
and  be  or  become  encumbered  by  a  chattel  mortgage,  or  if, 
with  the  knowledge  of  the  insured,  foreclosure  proceedings 
be  commenced  or  notice  given  of  sale  of  any  property  covered 
by  this  policy  by  virtue  of  any  mortgage  or  trust  deed."  You 
will  note  how  much  more  clearly  the  voidance  conditions  that 
relate  to  title  and  ownership  are  defined  in  this  New  York 
standard  form  than  is  the  case  in  that  of  Massachusetts.  In 
considering  clauses  that  recognize  these  varying  conditions 
of  title  and  ownership,  if  we  see  to  it  that  they  comply  with 
the  New  York  provisions,  we  are  sure  to  be  on  the  safe  side 
in  all  cases. 

Mortgagee  Interests 

The  most  frequent  of  the  clauses  relating  to  the  title  of 
the  insured  property  are  those  that  recognize  other  interests, 
these  apply  mainly  to  buildings  and  are  usually  those  of  a 
mortgagee  or  in  the  case  of  personal  property  the  conditions 
that  are  imposed  by  a  so-called  chattel  mortgage.  For  purposes 
of  safety  and  to  give  additional  security  to  a  creditor,  policies 
are  at  times  made  payable  to  such  creditor  even  though  he 
does  not  have  a  formal  lien  on  the  property  by  virtue  of  a  duly 
recorded  mortgage  or  assignment.  In  cases  of  this  sort  a  very 
simple  clause  will  suffice,  and  such  a  clause  is  usually  termed 
the  "loss  payable  clause"  and  only  states  that  "loss,  if  any  is 

payable    to as    his    interest   may    appear."      Should    a 

loss  occur  the  insuring  company  noting  this  clause  on  its  policy 
will,  in  making  out  its  draft  in  payment  include  not  only  the 
name  of  the  assured,  that  is  the  party  to  whom  the  policy  directly 
runs,  but  will  also  include  on  the  draft  or  check,  the  name  of 
the  payee  mentioned. 

When  a  mortgage  exists  it  is  desirable  to  be  somewhat 
more  explicit  than  this  in  order  to  make  clear  that  the  provision 
of  the  standard  policy  as  to  sole  and  unconditional  ownership. 


149 

has  not  been  ignored  in  the  taking  out  of  the  insurance,  and 
mortgagee  clauses  are  usually  written  in  one  of  two  different 
forms.  The  first  in  what  is  ordinarily  spoken  of  as  simply 
the  mortgagee  form,  and  reads  as  follows: 

"$.— . On   his   interest   as    mortgagee   on   the   four-story    brick 

building  situated  and  known  as  Nos It  is  agreed  that  when- 
ever this  company  shall  pay  to  the  mortgagee  any  loss  under  this  policy 
and  shall  claim  that  as  to  the  mortgagor  or  owner,  no  liability  existed, 
it  shall  at  once  be  legally  subrogated  to  all  the  rights  of  the  mortgagee 
under  any  and  all  obligations  to  the  mortgage  debt  to  the  extent  of  such 
payment,  or  at  its  option  may  pay  the  whole  principal  and  interest  due 
on  the  mortgage,  and  shall  thereupon  receive  a  full  assignment  and  transfer 
of  the  mortgage,  and  all  other  obligations  held  as  security  or  collateral 
for  the  mortgage  debt,  but  no  such  subrogation  shall  impair  the  right 
of  the  mortgagee  to  recover  the  full  amount  of  his  claim." 

In  contrast  to  this  form  clauses  are  in  common  use  in  many 
of  the  states  which  are  very  much  more  explicit,  and  of  which 
the  following  is  a  sample: 

Mortgage  Clause  With  Full  Contribution. 

"Loss  if  any  payable  to Bank  as  mortgagee  (or  trustee)  as 

interest  may  appear,  and  this  insurance,  as  to  the  interest  of  the  mortgagee 
(or  trustee)  only  therein,  shall  not  be  invalidated  by  any  act  or  neglect 
of  the  mortgagor  or  the  owner  of  the  within  described  property,  nor  by 
any  foreclosure  or  other  proceedings  or  notice  of  sale  relating  to  the 
property,  nor  by  any  change  in  the  title  or  ownership  of  the  property, 
nor  by  the  occupation  of  the  premises  for  purposes  more  hazardous  than 
are  permitted  by  this  policy.  Provided,  that  in  case  the  mortgagor  or 
owner  shall  neglect  to  pay  any  premium  due  under  this  policy  the  mort- 
gagee (or  trustee)  shall,  on  demand,  pay  the  same." 

This  is  only  a  part  of  the  full  contribution  mortgage  clause. 
It  also  contains  the  following  provisions,  that  the  mortgagee 
(or  trustee)  must  notify  the  company  of  any  change  of  owner- 
ship or  occupancy,  or  increase  of  hazard.  Also  that  he  shall 
be  liable  on  demand  for  additional  premium  due  to  such  increased 
hazard,  and  that  if  he  does  not  properly  attend  to  this  feature 
the  policy  shall  be  void.  Under  this  form,  too,  the  company 
further  reserves  the  right  by  a  special  clause  to  cancel  the 
poHcy  at  any  time,  as  prescribed  by  the  standard  policy,  but 
that  in  such  case  the  policy  will  continue  in  force  for  the  benefit 
of  the  mortgagee  for  ten  days  after  notice  may  have  been  served 
on  him,  after  which  time  his  rights  under  the  policy  cease. 
This  full  contribution  clause  still  further  provides  as  to  the 
relation  which  other  insurance  on  the  property  shall  bear  to 
loss  or  damage  sustained  when  held  by  parties  having  an  insur- 
able interest  therein,  whether  as  owners  or  mortgagees.  This 
is  a  very  important  provision  of  the  full  contribution  clause 
for  it  prevents  any  company  from  being  obliged  to  pay  possibly, 
a  total  loss  to  a  mortgagee  where  the  other  insurance  upon  the 
same  property  in  which  the  mortgagee  has  no  interest,  may 
get  off  with  a  very  trifling  contribution. 


150 

Both  of  these  forms  carry  with  them  the  right  for  the  com- 
pany paying  a  loss  to  the  mortgagee  to  be  immediately  subro- 
gated to  all  the  rights  that  the  mortgagee  formerly  held.  This 
usually  means  that  if  the  insuring  company  shall  pay  to  the 
mortgagee  the  full  amount  of  his  mortgage,  they  will  immedi- 
ately be  placed  in  the  position  of  mortgagees  and  have  the  same 
lien  upon  the  property  that  formed  the  collateral  for  the  mort- 
gage, that  the  mortgagees  themselves  had. 

Mortgagee  interests  are  so  varied  and  the  conditions  under 
which  mortgage  loans  are  made,  are  of  such  different  natures 
that  a  wide  variety  of  phrasing  has  crept  into  the  co-called 
mortgagee  clauses,  though  essentially  they  are  one  or  the  other 
of  the  two  types  of  clauses  that  we  have  just  spoken  of,  that 
is  those  either  with  or  without  the  full  contribution  feature. 
Whenever  possible  it  is  of  course,  in  the  interests  of  the  insuring 
company  to  secure  the  attachment  of  the  full  contribution 
clause,  especially  where  there  may  be  a  doubt  as  to  the  placing 
of  the  payee  or  mortgagee  clause  on  all  the  other  policies  covering 
the  same  property.  At  times  too,  it  is  desirable  for  the  mort- 
gagee to  have  made  a  part  of  the  clause  the  words  "under  present 
or  any  future  mortgages."  This  clause,  where  for  example, 
on  a  building  in  course  of  construction  additional  monies  may 
be  advanced  from  time  to  time  as  the  work  progresses,  is  a 
safeguard  to  both  the  mortgagor  and  the  mortgagee  and  is 
not  objectional  to  the  insuring  company. 

A  somewhat  unusual  clause  in  connection  with  mortgagee 
interests  is  the  so-called  "clause  of  consent,"  reading: 

"At  the  request  of  the  insured  this  company  hereby  consents  that 

loss,  if  any,  under  this  policy,   shall  be  payable  to (subject  to 

Mortgagee  Clause  attached)  not  intending  to  waive  and  not  thereby 
waiving,  any  previous  rights,  privileges  or  equities  secured  to  this  com- 
pany by  the  terms  and  stipulations  of  this  policy." 

Clauses  of  this  nature  may  be  attached  after  the  date  of 
the  policy  and  call  for  them  is  brought  about  by  the  fact  that 
a  property  on  which  there  is  already  existing  insurance,  has 
become  subject  to  a  mortgage,  and  the  insuring  company  is 
asked  to  consent  to  the  payment  of  the  loss  if  any,  to  the  mort- 
gagee but  at  the  same  time  you  will  note  that  it  does  not  waive 
any  of  the  previous  rights  or  privileges  that  might  accrue  to 
it  under  the  original  policy  contract. 

With  any  payee  clause,  whether  to  a  mortgagee  or  anyone 
else,  the  condition  for  the  insuring  company  to  be  sure  of  is 
as  to  the  relation  of  the  lien  to  sound  value.  In  other  words, 
what  is  the  equity  in  the  property  of  the  designated  owner? 

Buildings  on  Leased  Land. 

The  clauses  relating  to  the  leased  land  feature  in  order 
to  meet  the  provisions  of  the  New  York  policy  is  very  simple, 
and  perhaps  is  more  properly  a  part  of  the  descriptive  form 


151 

attaching  to  the  poHcy  than  a  clause  of  title.  It  simply  states 
that  the  insured  building  stands  on  leased  land.  More  than 
that  it  is  not  necessary  to  say  anything,  though  the  careful 
underwriter  will  of  course,  at  once  seek  to  find  out  what  are 
the  conditions  of  the  lease  under  which  the  building  is  allowed 
to  stand  on  land  belonging  to  someone  other  than  the  actual 
owner  of  such  building.  Simply  stating  that  the  building  is 
on  leased  land  discloses  the  condition  required  by  the  New  York 
standard  form  in  order  to  prevent  a  voidance  of  the  contract. 
While  it  is  not  essential  here  in  Massachusetts  to  disclose  this 
fact,  so  far  as  a  voidance  of  the  policy  goes,  it  is  in  justice  to 
the  insuring  company,  a  feature  that  should  be  known  since 
in  many  cases  it  is  a  material  fact  or  circumstance  affecting 
the  property. 

Subrogation. 

Clauses  of  subrogation  are  not  used  to  any  great  extent 
because  the  right  to  subrogate  is  clearly  granted  under  both 
of  the  standard  form's  of  policy  that  we  have  been  especially 
considering.  In  Massachusetts  no  restriction  is  placed  other 
than  the  extent  of  the  amount  paid  on  the  loss,  as  to  the  rights 
to  recover  under  subrogation  from  any  party  against  whom 
the  assured  may  feel  that  he  has  a  claim,  usually  on  account 
of  negligence  contributory  to  the  fire.  In  New  York  State 
the  further  restriction  is  placed  that  the  insuring  company  can 
only  claim  this  right  of  subrogation  (and  to  the  same  extent 
as  in  Massachusetts)  when  they  are  ready  to  claim  that  the  fire 
was  caused  by  the  act  or  neglect  of  some  third  party. 

Clauses  waiving  the  right  to  subrogate  are  becoming  more 
frequent  and  are  especially  so  in  policies  on  manufacturing 
plants  located  on  land  leased  from  or  controlled  by  a  railroad. 
Such  clauses  are  agreements  on  the  part  of  the  assured  not 
to  grant  the  right  of  subrogation  against  the  railroad,  and  are 
usually  and  rightfully  subject  to  an  additional  premium. 

Clauses  For  Special  Emergencies. 

Probably  the  most  interesting  clauses  that  we  have  for 
consideration  at  this  time  are  those  that  in  a  general  way,  may 
be  termed  clauses  for  special  emergencies.  Under  this  head 
I  allude  to  clauses  that  are  drafted  for  use  as  binders  and  clauses 
aiming  to  cover  or  to  exclude  losses  due  to  earthquake,  or  explo- 
sions or  some  other  disaster.  In  a  certain  sense  all  clauses  of 
this  special  emergency  type  are  ones  of  permission,  since  they 
grant  special  privileges  not  ordinarily  contemplated  under  the 
standard  contract. 


152 


Binders. 


The  first  of  these  special  emergency  conditions  that  we 
will  consider  is  that  where  a  binder  is  required.  You  all  know 
how  important  it  often  is  to  be  able  to '  protect  by  insurance 
at  a  moment's  notice  some  property  that  it  is  not  possible  at 
the  time  for  an  insurer  to  immediately  issue  a  policy  on;  mer- 
chandise perhaps,  that  is  being  delivered  at  short  notice  into 
a  warehouse  where  the  rate  is  not  yet  known,  or  where  other 
features  necessary  to  the  completion  of  the  policy  contract  are 
still  matters  of  doubt.  Under  these  conditions,  the  binder 
(an  every  day  occurrence)  naturally  comes  into  use.  There 
is  no  special  clause  or  form  prescribed  for  this  special  emergency 
instrument.  The  simple  acknowledgment  by  an  authorized 
agent,  or  official,  that  he  is  holding  binding  a  certain  amount 
in  his  company  on  a  specified  property  owned  by  the  party 
in  whose  interest  the  insurance  is  being  asked,  and  located 
in  a  properly  defined  place,  or  places,  is  all  that  is  necessary, 
and  while  such  binders  are  usually  in  the  form  of  simple  written 
agreements,  a  verbal  binder  is  in  the  eyes  of  the  law,  fully  as 
binding  as  if  it  was  the  subject  matter  of  a  full  fledged  legal 
document.  There  would  be  no  use  in  prescribing  any  set  form 
or  clause  to  be  used  in  the  phrasing  of  binders,  for  since  the 
emergencies  under  which  they  are  called  into  use,  are  almost 
always  sudden  and  unexpected,  no  one  would  think  of  living 
up  to  any  such  prescribed  form  or  clause,  but  the  Courts  have 
clearly  defined  that  the  act  of  issuing  a  binder  is  of  absolutely 
the  same  importance,  except  in  that  of  form,  as  is  the  writing 
and  delivering  of  a  policy.  Binders,  it  must  be  remembered, 
are  subject  to  the  same  conditions  over  cancellation  that  obtain 
with  policies. 

Earthquakes  and  Disturbances  of  Nature. 

Emergencies  such  as  arise  under  conditions  of  fire  losses 
attendent  upon  an  earthquake,  raise  questions  of  intense  interest, 
and  those  of  us  who  spent  many  weeks  in  connection  with  the 
losses  at  San  Francisco  in  1906,  have  good  reason  to  believe 
that  the  effect  of  earthquake  conditions  on  the  insurance  con- 
tract is  truly  a  most  puzzling  one.  The  standard  policy  as 
ordinarily  drafted,  lists  a  number  of  special  emergency  condi- 
tions, such  as  invasion,  insurrection,  riot,  civil  war,  military 
or  usurped  power  and  explosion  of  any  kind. 

In  some  instances  companies  have  felt  that  loss  resulting 
from  fire  caused  by  an  earthquake  could  be  satisfactorily  voided 
in  the  policy  contract  by  the  simple  insertion  of  the  word  "earth- 
quake" along  with  the  "civil  war,  insurrection,"  etc.,  features 
of  the  policy.  Experience  has  clearly  shown  though,  and  it 
was  demonstrated  over  and  over  again  in  San  Francisco,  that 
the  insertion  of  this  word  did  not  necessarily  void  the  contract. 


153 

The  burden  of  proof  was  at  once  thrown  upon  insuring  companies. 
Did,  or  did  not,  the  fire  that  destroyed  the  subject  of  the  insur- 
ance start  from  earthquake?  Supposing  too,  that  the  earth- 
quake did  cause  a  fire  in  a  certain  building,  and  that  from  that 
building  the  fire  passed  on  to  an  entirely  separate  property 
belonging  to  another  party  and  destroyed  it.  The  cause  of 
the  destroying  fire  to  the  last  mentioned  building  could  simply 
be  set  down  as  fire  in  an  exposing  building.  Even  were  the 
insurers  always  able  to  prove  clearly  that  the  origin  of  the 
fire  was  from  the  earthquake,  (a  condition  that  it  is  almost 
impossible  to  prove  when  earthquake  conditions  exist)  then 
in  cases  like  that  of  the  second  building  there  would  still  be  no 
ground  for  dispute. 

^  Whether  or  no,  a  clause  can  ever  be  effectively  drafted 
by  insurers  that  will  void  the  policy  in  the  event  of  an  earthquake, 
seems  to  be  a  matter  of  grave  doubt.  The  strongest  form  of 
clause  yet  devised,  and  the  one  that  was  in  use  with  many  com- 
panies in  Jamaica  at  the  time  of  the  Kingston  earthquake  a 
few  years  ago,  reads  like  this: 

"In  ccnsideration  of  the  reduced  rate  at  which  this  policy  is  written, 
it  is  hereby  mutually  understood  and  agreed  that  in  the  event  of  an 
earthquake,  this  policy  shall  immediately  cegse,  and  be  void  and  shall 
so  remain  for  a  period,  (usually,  I  believe)  of  seventy-two  hours." 

It  would  certainly  seem  as  if,  should  a  fire  immediately 
follow  an  earthquake,  that  a  clause  of  this  kind  forming  a  part 
of  the  policy  contract,  absolutely  voided  the  same  and  thoroughly 
safeguarded  the  insuring  company,  but  even  this  clause  has 
not  proved  infallible  by  any  means  for  the  claim  was  made 
in  Jamaica  that  at  the  time  the  earthquake  occurred  there  was 
a  fire  that  had  just  "started  in  one  of  the  buildings  that  after- 
wards fell  down,  and  that  therefore,  at  the  time  the  fire  began, 
which  evidently  destroyed  a  large  part  of  the  city,  the  insurance 
w^s  in  forc'e,  and  the  contract  effective.  Illustrations  can  be 
multiplied  without  number,  and  many  of  them  extremely 
interesting,  as  illustrating  not  only  the  ingenuity  of  the  under- 
writers, but  the  difficulties  of  drafting  a  clause  that  can  truly 
be  said  to  be  earthquake  proof. 

Fallen  Buildings. 

Another  interesting  feature  that  arises  in  connection  with 
earthquake  losses  is  that  of  fallen  buildings.  There  is  burned 
in  the  minds  of  all  who  were  in  San  Francisco  in  the  year  1906, 
the  words,  'Tf  a  building  or  any  part  thereof  fall,  except  as  the 
result  of  fire,  insurance  by  this  poHcy  on  such  building  or  its 
contents  shall  immediately  cease."  What  a  troublesome  clause 
this  was  to  the  San  Francisco  adjusters!  Not  only  was  it  very 
difficult  after  a  building  had  been  destroyed  by  fire  to  prove 
whether  or  not  it  was  a  standing  or  a  fallen  building  at  the  time 
the  fire  reached  it,  but  also  the  words  "Any  part  thereof"  was 


154 

the  cause  of  constant  dispute  between  claimants  and  those 
adjusters  who  were  seeking  to  make  salvages  on  any  possible 
pretext,  some  claiming  that  where  a  chimney  tipped  over,  or 
where  a  cornice  was  somewhat  injured,  or  some  of  the  plas- 
tering inside  the  building  had  fallen  that  a  voidance  of  the 
policy  was  thereby  constituted  and  that  there  was  no  insurance 
in  force  at  the  time  the  fire  reached  it.  There  were  cases  of 
this  sort  where  there  was  undisputable  proof  that  the  building 
had  been  more  or  less  damaged  before  it  burned,  but  the  unrea- 
sonableness of  maintaining  that  because  a  chimney  for  example, 
had  fallen  above  the  roof,  that  necessarily  such  building  had 
become  unprotected  by  the  policy  taken  out  to  safeguard  it, 
was  one  that  the  more  reputable  companies  did  not  seek  to 
make  a  defense  of.  The  usual  course  of  procedure  among  these 
companies,  if  there  was  any  evidence  that  the  building  was 
in  a  damaged  condition  before  the  fire  reached  it,  was  to  arrive 
as  satisfactorily  as  might  be  at  the  value  of  the  building  in  its 
damaged  condition,  and  adjust  the  insurance  upon  that  basis. 

Before  leaving  this  subject  of  earthquakes,  I  would  call 
your  attention  to  a  form  that  I  see  is  in  use  in  some  places 
designed  to  meet  this  earthquake  condition.     This  form  reads: 

"This  Company  shall  not  be  liable  for  loss  or  damage  occasioned 
by  or  through  any  volcano,  earthquake,  hurricane  or  other  eruption, 
convulsion  or  disturbance  of  nature.' 

My  only  comment  on  this  form  is  that  it  is  useless  for  just  such 
reasons  as  we  have  already  stated. 

Explosions. 

Just  a  word  on  one  of  the  other  special  emergency  cases 
for  which  clauses  are  occasionally  designed,  I  refer  to  explo- 
sion. Damage  caused  by  explosion  is  clearly  not  covered  by 
the  standard  policy  according  to  its  own  phraseology.  If  the 
explosion  is  the  result  of  a  fire  that  is  already  under  way,  the 
fire  being  the  direct  cause  of  the  explosion,  and  the  explosion 
simply  being,  as  we  might  say,  a  part  of  the  fire  damage,  the 
fire  policy  is  of  course,  directly  liable,  but  if  the  conditions 
are  reversed  and  an  explosion  occurs  which  causes  the  fire, 
then  the  intent  of  the  policy  is  clearly  that  a  voidance  has  been 
constituted,  and  that  there  is  therefor  no  liability.  You  can 
readily  see  that  the  same  conditions  of  doubt  and  difficulty 
of  proof  will  at  once  come  up  in  cases  of  this  sort  that  occur 
under  earthquake  conditions  and  the  same  line  of  reasoning 
that  we  spoke  of  in  connection  with  earthquake  clauses  is  equally 
applicable  here.  A  great  many  extremely  interesting  features 
have  come  up  in  connection  with  fire  losses  where  there  were 
explosions.  One  of  these  is  the  well  known  Tarrant  case  in 
New  York  which  was  the  subject  of  much  litigation.  A  confla- 
gration originated  in  the  Tarrant  building  itself,  these  people 
being  wholesale  druggists.     After  burning  an  hour  or  so,   the 


155 

fire  reached  a  large  stock  of  explosive  drugs  and  chemicals. 
The  effects  of  this  explosion  were  so  severe  that  all  the  neigh- 
boring buildings  were  wrecked,  and  in  the  case  of  the  owners 
of  one  of  these  buildings,  litigation  ensued,  the  insuring  com- 
pany taking  the  ground  that  the  building  was  destroyed  by 
explosion  and  not  by  fire.  The  building  in  question  was  over 
fifty  feet  away  from  the  Tarrant  building;  there  were  other 
buildings  between  it  and  the  building  in  which  the  fire  originated, 
and  also  a  narrow  street.  Both  of  the  intervening  buildings 
were  blown  down  by  the  explosion  and  the  ruins  of  them,  as 
well  as  of  the  building  over  which  litigation  was  pending,  were 
completely  burned.  In  this  particular  case  the  lower  Court 
found  for  the  owner  on  the  ground  that  though  his  building 
was  wrecked  by  an  explosion,  that  a  fire  was  the  cause  of  the 
explosion  and  that,  therefore,  the  insuring  company  was  liable. 
On  an  appeal,  the  higher  Court  reversed  this  decision  and  held 
that  the  loss  was  by  explosion,  not  by  fire,  and  that  therefore, 
under  the  provision  in  the  standard  policy,  the  insuring  com- 
pany was  not  liable.  Probably  I  have  said  enough  about  these 
special  emergencies  to  cause  you  to  realize  that  the  working 
out  of  clauses  that  may  be  designed  to  guard  against  or  to  provide 
for  them,  are  extremely  uncertain  as  to  their  outcome. 

The  special  form  adopted  in  some  localities  to  include 
coverage  of  loss  caused  by  explosion  reads  as  follows: 

Explosion  Clause. 

"In  consideration  of  an  additional  premium  equal  to  ten  per  cent. 
of  the  amount  of  premium  otherwise  due  on  this  policy  it  is  agreed  that 
in  the  event  of  any  explosion,  fire  ensuing,  this  Company  shall  pay  the 
loss  on  the  property  hereby  insured,  if  injured  by  fire,  at  the  value  thereof 
before  the  explosion;  provided  that  if  there  be  other  insurance  upon  the 
JDroperty  damaged  this  Company  shall  be  liable  only  for  such  proportion 
of  the  loss  or  damage  as  the  amount  hereby  insured  bears  to  the  whole 
amount  insured  thereon,  whether  such  other  insurance  contains  a  similar 
clause  or  not." 
"Attached  to  policy  No , ...Ins.  Co." 

The  principal  criticism  that  we  have  to  express  regarding  this 
is  that  a  premium  based  on  a  percentage  is  likely  to  be  absurd. 
Explosion  effects  may  be  fully  as  serious  in  a  high  grade  low 
rated  property  as  on  a  poor,  high  rated  risk.  Hence  the  assum- 
ing of  this  extra  hazard  for  perhaps  one  or  two  cents  a  year 
approaches  an  absurdity.  My  own  idea  is  that  an  adequate 
flat  charge  should  replace  the  percentage. 

Some  Further  Emergency  Clauses. 
Of  the  making  of  fire  insurance  clauses  there  is  no  end. 
New  processes  of  manufacture,  changed  methods  of  business, 
the  enactment  of  more  rigid  building  laws,  etc.,  etc.,  all  tend 
to  create  conditions  which  have  a  direct  effect  on  the  liability 
assumed   by   the   insurance   companies   and   often   constitute   a 


156 

material  increase  of  hazard.  It  would  not  be  possible  at  this 
time  to  attempt  to  enumerate  even  a  small  portion  of  these 
increasing  emergency  conditions,  but  we  may  with  profit  call 
attention  to  two  or  three  that  are  being  forcibly  brought  to  the 
attention  of  underwriters  at  the  present  time,  viz.;  demolition 
and  disclaimer  clauses,  cotton  insurance  clauses,  and  subway 
permit  clauses. 

Demolition  and  Disclaimer. 

The  call  for  clauses  of  this  character  is  an  outcome  of  state 
or  municipal  laws  governing  the  repair  of  damaged  buildings. 
When  cities  and  towns  are  in  their  beginnings  and  are  not  con- 
gested by  the  crowding  together  of  buildings,  any  type  of  struc- 
ture that  its  owner  saw  fit  to  erect  was  allowed.  The  result 
is  an  excess  of  frame,  or  light  masonry  construction,  with  no 
fire  retarding  devices,  with  combustible  roofs  and  in  short 
every  kind  of  quick  burning  construction  imaginable.  As 
cities  have  grown  the  menace  to  life  and  property  from  this 
cause  being  recognized  by  the  state  or  city  authorities  has 
caused  the  adoption  of  building  laws  prescribing  standards 
of  construction  that  not  only  must  be  lived  up  to  in  the  erection 
of  new  buildings,  but  which  must  also  be  carried  out  if  an}^ 
material  change  or  repair  is  to  be  made  on  an  already  standing 
structure.  Now  it  is  one  thing  to  repair  a  damaged  building 
by  putting  it  back  into  the  condition  it  was  in  before  a  fire 
by  the  use  of  materials  of  the  kind,  quality  and  arrangement 
that  formerly  obtained,  but  quite  another  and  a  far  more  expen- 
sive thing  to  replace  by  the  use  of  the  higher  grade  materials, 
built  up  under  the  improved  methods  that  the  new  building 
laws  require.  A  notable  illustration  of  this  is  the  oft  mentioned 
advertiser  building  claim  in  Boston  some  years  ago.  This 
building  suffered  from  fire,  the  loss  was  adjusted  in  usual  course 
but  the  owners  objected  to  the  award  because  it  only  paid  them 
for  the  actual  damage  sustained  by  the  building  as  it  was  at  the 
time  the  fire  occurred.  That  is  the  insurance  companies  agreed 
to  pay  what  it  would  cost  to  put  the  building  back  in  the  same 
shape  it  was  before  the  fire.  Surely  under  a  policy  of  indemnity 
worded  as  both  the  New  York  and  Massachusetts  policies  are 
it  would  seem  as  if  nothing  more  could  justly  be  claimed.  The 
assured,  however  said,  "but  we  cannot  put  the  building  back 
in  the  same  condition  it  was  in;  the  law  will  not  allow  it,  there- 
fore since  the  fire  is  the  direct  cause  of  our  having  to  go  to  the 
additional  expense,  the  fire  policies  should  meet  it."  Seemingly 
this  throws  the  indemnit}^  feature  of  the  contract  one  side,  and 
wholly  ignores  the  wording  of  the  policy.  I  understand  that 
the  main  question  at  issue,  that  i§ — "are  the  fire  insurance 
companies  liable  for  such  increased  cost  of  repair  where  it  has 
not  been  assumed  by  special  clause  or  rider  attached  to  the 
policies"  —  has    never   been    directly   decided    by    the    Courts. 


157 

A  recent  case  makes  it  appear  that  the  companies  cannot  be 
held,  but  this  particular  case  was  so  involved  with  other  ques- 
tions at  issue  that  it  can  hardly  be  regarded  as  final.  In  the 
advertiser  case  referred  to  the  question  was  argued  before 
a  master  and  while  he  ruled  that  the  companies  must  pay  the 
increased  costs,  there  is  no  certainty  that  the  Courts  might 
not  have  ruled  otherwise.  The  fact  that  the  master's  finding 
in  this  much  cited  case  did  not  necessarily  and  forever  remove 
this  doubt,  has  caused  both  underwriters  and  property  owners 
to  seek  to  have  clauses  affixed  to  their  policies  that  would 
leave  no  uncertainty.  The  underwriters  sought  to  have  on  all 
policies  that  they  issued  on  buildings  not  up  to  the  standard 
required  by  law  and  situated  in  the  areas  where  such  law 
applied  a  so-called  disclaimer  clause  reading: 

Disclaimer  Clause. 

"In  consideration  of  the  reduced  rate  at  which  this  policy  is  written 
it  is  stipulated  and  made  a  condition  of  this  contract  that,  unless  such 
HabiUty  is  assumed  by  rider  attached  to  this  policy,  this  Company  shall 
not  be  liable  for  loss  under  this  policy  beyond  the  actual  valae  of  the 
property  herein  described  at  the  time  any  loss  or  damage  occurs,  nor 
beyond  what  it  would  then  cost  the  assured  to  repair  said  propsrty,  or 
to  restore  it  to  the  condition  in  which  it  was  immediately  before  such 
loss  occurred,  using  material  of  like  kind  and  quality,  and  in  either  case 
making  suitable  allowance  for  depreciation  from  any  cause;  nor  for 
loss  occasioned  by  ordinance  or  law  regulating  construction  or  repair 
of  buildings." 

The  object  of  this  clause  is  apparent.  It  distinctly  emphasizes 
the  indemnity  feature  of  the  contract  and  it  limits  the  insur- 
ance companies'  liability  to  the  amount  necessary  to  put  the 
building  back  into  the  same  condition  it  was  before  the  fire. 
In  fact  it  appears  to  prevent  beyond  a  doubt  the  collection  of 
any  increased  expense  due  to  the  enforcement  of  laws  calling 
for  a  better  building. 

The  property  owners  also  feeling  doubtful  that  the  master's 
decision  in  the  advertiser  case  secured  to  them  the  certainty 
that  the  insurance  companies  must  pay  the  increased  cost  of 
repair,  called  for  a  rider  on  their  policies  whereby  the  com- 
panies agreed  to  admit  it  as  a  part  of  the  expense  for  which  they 
were  liable.  Now  it  is  very  apparent  that  if  this  liability  must 
be  assumed,  it  would  call  for  greatly  increased  payments  under 
the  policies  in  event  of  fire,  hence  it  is  a  something  for  which 
an  increased  premium  should  be  paid.  The  clause  now  used 
to  protect  the  building  owner  and  to  provide  proper  compen- 
sation for  the  insurance  company  is  called: 

Demolition  and  Increased  Cost  of  Construction. 

"In  consideration  of dollars  additional  premium  this  Company 

shall  be  liable,  in  case  of  loss  or  damage  under  this  policy,  for  loss  or 
damage  occasioned  by  the  enforcement  of  any  State  or  Municipal  law 
or  ordinance  regulating  the  construction  or  repair  of  buildings  and  in 


158 

force  at  the  time  such  loss  occurs  which  necessitates,  in  rebuilding,  the 
demolition  of  any  portion  of  the  insured  premises  which  has  not  suffered 
damage  under  this  policy,  and  this  Company  shall  also  be  liable  for  the 
additional  cost  of  repair  or  reconstruction,  due  to  the  enforcement  of 
such  law  or  ordinance,  or  portions  of  the  insured  premises  which  have 
suffered  damage,  but  the  total  liability  of  this  Company  under  this  policy 
shall  not  exceed  the  amount  for  which  this  policy  is  issued,  nor  such  pro- 
portion of  the  actual  value,  prior  to  the  fire,  of  the  property  insured 
hereby,  nor  of  any  loss  thereto,  as  the  amount  of  this  policy  bears  to  the 
total  insurance  covering  on  the  property  described  in  this  policy,  whether 
such  insurance  all  contains  the  foregoing  clause,  or  is  on  the  same  interest 
as  that  described  in  this  policy  or  not. 

"If  this  policy  covers  more  than  one  building  the  foregoing  liability 
shall  attach  to  each  building  separately,  not  exceeding  the  amount  speci- 
fically insured  thereon,  or  if  it  does  not  attach  on  each  building  in  a  specific 
amount,  in  proportion  as  the  sound  value  of  each  building  bears  to  the 
sound  value  of  all." 

From  this  you  will  note  that  the  insurance  company  agrees 
to  admit  HabiHty  because  of  a  specified  consideration  paid  there- 
fore. 

With  many  companies  the  disclaimer  is  mandatory  on 
all  policies  on  which  an  increased  repair  cost  clause  could  be 
made.  The  demolition  clause  is  optional  with  the  building  owner. 
If  he  wants  it  and  will  pay  for  it  he  can  have  it. 

Special  modifications  of  both  the  demolition  and  increased 
costs  of  construction  clause  and  the  disclaimer  clause  are  used 
to  make  it  apply  on  policies  covering  rent,  leasehold  interest 
and  use  and  occupancy  insurance  in  buildings  where  increased 
cost  of  repair  conditions  such  as  we  have  described  could  exist; 
and  affect  the  amount  to  be  paid  by  the  insurance  company. 

Another  interesting  special  emergency  clause  in  use  in 
our  southern  states  is  the: 


Cotton  Insurance  Clause. 

A  very  large  portion  of  our  southern  cotton  has  annually 
goiie  to  British  or  European  mills.  The  present  war  has  pre- 
vented its  sale  and  shipment  and  in  consequence  the  cotton 
growers  and  dealers  in  the  south  are  loaded  up  with  unsold  cotton, 
and  no  immediate  prospects  of  a  market.  A  serious  moral 
hazard  therefore  exists,  and  the  insurance  companies  at  once 
foresaw  that  they  were  likely  to  be  the  only  medium  by  which 
this  cotton  could  be  turned  into  cash.  How  can  this  danger  be 
averted?  Obviously  it  would  be  unjust  and  prejudicial  to  refuse 
altogether  to  insure  this  enormous  cotton  stock,  but  it  was  equally 
clear  that  some  clause  must  be  used  on  the  fire  policies  to  reduce 
to  a  minimum  the  temptation  to  unload  on  the  insurance  com- 
panies by  those  whose  honesty  might  be  unequal  to  the  strain. 

Several  restrictive  clauses  as  to  storage,  limitation  of  value 
per  pound,  etc.,  were  more  or  less  used,  but  probably  the  most 
effective  of  all  in  keeping  down  the  fire  waste  was  the  following: 


159 
Cotton  Replacement  Clause. 

"Notice  is  hereby  given  that  in  the  event  of  loss  under  this  policy 
this  Company  has  the  right  to  replace  with  Cotton  of  like  kind  and 
quality  the  cotton  that  may  be  damaged  or  destroyed  by  fire  as  provided 
for  under  the  printed  conditions  of  the  policy." 

This  clause  you  will  note  places  the  assured  where  if  he 
had  a  loss  he  might  still  find  himself  without  the  desired  cash, 
but  in  possession  of  the  same  quantity  and  quality  of  cotton 
that  he  owned  before  the  fire.  Whether  or  no  it  was  wholly 
in  consequence  of  this  clause  that  the  dreaded  moral  hazard 
losses  on  cotton  were  averted  we  cannot  say.  We  can  state 
though  that  there  was  no^  abnormal  loss  on  this  commodity 
and  assumably  the  clause  was  a  deterrent  factor. 

Other  requirements  in  connection  with  this  clause  were 
called  for  by  many  insurance  companies.  Such  as  an  absolute 
demand  for  adequate  co-insurance  and  an  agreed  price  per 
pound  for  a  certain  grade  of  cotton  to  serve  as  a  basis  for  the 
replacement  value. 

One  more  special  emergency  clause  to  illustrate  the  means 
taken  to  guard  against  another  * 'modern  improvement"  hazard, 
I  refer  to  the 

Subway  Permit. 

"In  consideration  of the  same  being cents  upon  each 

one  hundred  ($100)  dollars  of  insurance  carried  by  this  Company  on 
the  herein  described  property,  permission  is  given  to  make  such  alterations 

and  these  only  on  the  building , Street  as  may  be  necessary 

in  connection  with  the  work  of  constructing  the  so-called 

"Attached  to  pohcy  No — - - - Ins.  Co." 

Probably  no  comment  is  necessary  to  make  more  clear  the 
purpose  of  this  clause.  Still  a  word  may  not  be  amiss.  The 
construction  of  subways,  especially  under  narrow  streets  where 
the  abutting  buildings  are  high  and  heavy,  calls  for  especial 
construction  work  in  reinforcing  or  shoring  foundations.  If 
this  were  not  done  damage  from  settlement  might  take  place 
which  in  turn  would  cause  fire.  Possibly  the  ordinary  clause 
for  building  or  repair  might  cover  this,  or  the  exemption  clause 
in  the  policy  relating  to  fire  caused  indirectly  by  * 'civil  authority." 
Either  of  these  restrictions  however,  might  prove  inadequate 
to  the  mind  of  the  court  in  event  of  litigation  hence  it  was  deemed 
wise  to  draft  a  special  clause  like  the  above  to  make  clear  beyond 
question  the  intent  of  the  policy. 


Standard  Policy — Clauses  and  Forms 

Seventk  Paf)er 

BY 

WILLIAM  B.  MEDLICOTT 
Clauses  of  Distribution  and  of  Liability  Limitation 

No  class  of  clauses  in  common  use  with  fire  insurance 
policies  are  so  essential  and  at  the  same  time,  so  much  the  sub- 
ject of  criticism  as  those  that  are  designed  to  define  in  an 
equitable  manner  the  extent  of  the  liability  of  the  insuring  com- 
pany and  at  the  same  time  place  the  contract  on  such  a  footing 
that  its  proper  cost  or  rate  can  be  determined.  By  distribution, 
liability  and  limitation,  we  mean  clauses  like  the  following: 
the  three-fourths  value  clause;  the  three-fourths  loss  clause; 
the  average  clause;  and  the  co-insurance,  or  reduced  rate,  or 
assessed  value  clause,  these  last  three  names  applying  to  one 
and  the  same  provision. 

The  Three-Fourths  Value  Clause. 

Taking  up  in  the  order  named  the  various  clauses  mentioned, 
we  will  refer  briefly  to  the  three-fourths  value  clause,  the  ordi- 
nary form  of  this  being  substantially  the  following : 

Three-Fourths  Value  and  Limitation  Clause. 

"It  is  a  part  of  the  consideration  of  this  poHcy,  and  the  basis  upon 
which  the  rate  of  premium  is  fixed  that  in  the  event  of  loss,  this  company 
shall  not  be  hable  for  an  amount  greater  than  three-fourths  of  the  actual 
cash  value  of  the  property  covered  by  this  poHcy  at  the  time  of  such  loss 
in  case  of  other  insurance  (consent  to  which  must  in  all  cases  be  indorsed 
hereon)  the  company  shall,  whether  policies  are  concurrent  or  not,  be 
liable  for  only  its  pro  rata  proportion  of  such  three-fourths  value." 

You  will  note  that  the  title  of  this  clause  is  that  of  three-fourths 
value  and  limitation.  You  will  also  note  that  the  attachment 
of  a  clause  of  this  character  forms  a  part  of  the  consideration 
that  enters  into  the  fixing  of  the  rate  on '  properties  to  which 
it  applied.  With  such  a  clause  the  rate  can  be  materially  reduced 
because  as  the  clause  distinctly  states,  "the  company  shall 
not  be  liable  for  an  amount  greater  than  three-fourths  of  the 
actual  cash  value."  Also  in  the  event  of  there  being  insurance 
in  more  than  one  company,  this  same  three-fourths  of  the  total 


161 

sound  value  must  be  regarded  as  the  total  insurable  value  of 
the  property  at  the  time  the  loss  occurs  and  the  insurance  must 
pro  rate  upon  that  basis. 

While  this  clause  is  emphatically  one  of  limitation,  its  prime 
object  is  to  compel  the  assured  to  carry  a  part  of  the  risk  himself, 
and  it  also  very  effectively  does  away  with  any  possibility  of 
gain  coming  to  him  by  means  of  over  insurance.  It  is  a  clause 
that  is  especially  applicable  in  classes  of  risks  where  the  aver- 
age of  loss  has  been  unduly  high,  and  yet  where  proper  care 
and  supervision  on  the  part  of  the  assured  would  probably 
have  prevented  a  great  number  of  these  losses.  Possibly  the 
most  notable  class  of  risks  that  have  been  subjected  to  the  attach- 
ment of  this  clause  are  the  paper  mills  of  the  earlier  days,  where 
losses  were  so  frequent  and  the  insurance  regarded  as  so  undesir- 
able by  insurers,  that  the  companies,  as  a  matter  of  self  preser- 
vation, found  it  necessary  to  attach  a  clause  of  this  nature 
to  the  policies  to  prevent  an  excessive  loss  ratio  from  the  class. 
Clauses  of  this  nature  were  among  the  first  that  were  designed 
to  make  the  insured  a  sharer  in  carrying  the  burden  of  his  own 
fire  loss.  They  tend  to  reduce  the  moral  hazard  and  make 
imperative  the  care  and  protection  that  the  assured  always 
should  exercise. 

The  Three-Fourths  Loss  Clause. 

The  next  clause  that  we  listed  is  called  the  three-fourths 
loss  clause.  A  clause  of  this  nature  is  one  that  limits  the  lia- 
bility of  the  insuring  companies  to  three-fourths  of  the  total 
loss  sustained,  and  in  this  way  makes  the  assured  carry  a  part 
of  his  own  risk  in  much  the  same  manner  that  the  three-fourths 
value  clause  does.  Neither  of  these  clauses  are  in  as  common 
use  today  as  they  formerly  were,  since  the  classes  of  property 
to  which  they  are  more  directly  applicable  are  "now  largely  under 
the  protection  of  automatic  sprinklers  and  are  subject  to  the 
co-insurance  or  reduced  rate  clause. 

Average  and  Co-insurance. 

By  far  the  more  important  part  of  this  discussion  should 
be  directed  to  the  so-called  average  clause  and  the  co-insurance 
clause.  The  use  of  the  word  "average,"  in  connection  with 
clauses  attached  to  policies  of  insurance,  appears  to  be  a  varying 
one  in  different  localities.  In  this  country,  we  uniformly  I 
believe,  regard  an  average  clause  as  one  that  distributes  the 
liability  of  the  company  by  apportioning  under  some  prescribed 
rule,  just  what  part  of  the  insurance  shall  apply  in  any  specified 
locality,  or  on  any  specially  defined  property.  In  this  way  it 
becomes  to  a  certain  extent,  a  distribution  clause.  In  contrast 
to  this  definition  of  what  we  mean  by  an  average  clause,  is  one 


162 

that  obtains  to  some  extent  in  countries  where  the  same  mean- 
ing is  given  to  the  term  "average"  that  we  apply  to  a  clause 
of  full  co-insurance,  or  that  is,  what  we  would  term  a  100% 
clause. 

Before  we  discuss  these  differences  it  will  be  best  for  us  to 
quote  each  one  of  these  clauses  as  they  are  commonly  applied 
in  this  country.  The  average  clause  reads  as  follows,  and  is 
applicable  to  blanket  or  compound  forms  of  insurance: 

The  Average  Clause. 

"This  policy  is  attached  in  each  building  or  locality  in  proportion 
as  the  value  in  each  bears  to  that  in  all." 

Now  to  illustrate  let  us  suppose  that  a  policy  for  $9,000 
was  written  covering  merchandise  contained  in  three  different 
buildings  and  written  with  an  average  clause.  At  the  time  of 
a  fire  in  building  No.  2,  it  was  found  that  building  No.  1,  con- 
tained merchandise  to  a  value  of  $5,000,  No.  2  $4,000,  No.  3 
$3,000  or  that  is  all  of  the  three  buildings  contained  stocks  to 
a  total  value  of  $12,000.  Under  these  conditions,  one-third 
of  the  policy  of  $9,000  or  that  is  $3,000  would  be  the  insurance 
covering  directly  in  No.  2,  the  burned  building,  because  four 
thousand  twelve-thousandths  equals  one-third.  This  illus- 
tration certainly  makes  it  appear  that  the  average  clause  is  also 
a  clause  of  distribution,  and  it  also  is  a  clause  of  limitation 
since  it  fixes  the  limit  under  which  any  policy,  or  policies,  can 
be  made  liable  in  any  one  particular  place  or  on  any  one  speci- 
fied property. 

The  Co-insurance  Clause. 

Before  we  speak  more  fully  of  the  difference  in  its  limiting 
features  between  the  average  and  the  co-insurance  or  reduced 
rate  clause,  let  us  quote  one  of  the  latter.  The  forms  generally 
used  read  like  this : 

"In  consideration  of  the  reduced  rate  at  which  this  policy  is  written, 
it  is  expressly  stipulated  and  made  a  condition  of  the  contract  that  in 
the  event  of  loss  this  Company  shall  be  liable  for  no  greater  proportion 

thereof  than  the  amount  heieby  insured  bears  to  per  cent,   of 

the  actual  value  of  the  property  described  herein,  at  the  time  when  such 
loss  shall  happen,  nor  for  more  than  the  proportion  which  this  policy 
beais  to  the  total  insurance  thereon;  provided,  however,  that  if  the 
aggregate  claim  for  any  loss  shall  not  exceed  5  per  cent,  of  such  actual 
value  no  special  inventory  or  appraisement  of  the  undamaged  property 
shall  be  required. 

"If  this  policy  be  divided  into  two  or  more  items,  the  foregoing 
conditions  shall  apply  to  each  item  separately,  and  if  two  or  more  build- 
ings or  their  contents  be  included  in  a  single  item  the  application  of  the 
provision  as  to  special  inventory  or  appraisement  shall  be  limited  to 
each  building  and  its  contents." 

It  is  claimed  by  some  that  this  co-insurance  clause  is  not  only 
a  clause  of  limitation,  but  that  it  is  also  one  of  distribution, 
the  contention  being  based  on  the  words  "Nor  for  more  than 


163 

the  proportion  which  this  policy  bears  to  the  total  insurance 
thereon,"  it  being  argued  that  in  the  case  of  a  blanket  policy 
covering  several  properties,  that  when  a  loss  occurs  on  some 
one  of  these  properties  on  which  there  is  specific  insurance  cov- 
ering only  on  that  one,  that  the  presence  of  a  co-insurance  clause 
virtually  fixes  that  part  of  the  blanket  policy  that  can  be  assessed 
under  conditions  such  as  we  have  described;  the  contention 
being  that  the  words  "Nor  for  more  than  the  proportion  which 
this  policy  bears  to  the  total  insurance  thereon,"  being  equiva- 
lent to  the  average  clause  in  dividing  the  blanket  policy  into 
specific  parts  instead  of  the  entire  blanket  policy  being  liable 
to  be  called  upon  to  contribute  on  any  one,  or  all  of  the  prop- 
erties on  which  it  covers. 

The  general  interpretation,  however,  of  this  portion  of  the 
reduced  rate  clause  that  we  are  speaking  of  is  the  reverse  of  this, 
and  simply  limits  the  maximum  for  which  the  policy  carrying 
this  clause  can  be  liable  in  the  same  way  that  the  limitation 
»  clause  in  the  standard  policy  contract,  limits  the  liability  on 
any  one  policy  by  the  use  of  the  wofds,  in  the  Massachusetts 
policy,  "that,  if  there  shall  be  any  other  insurance,  the  insured 
can  recover  on  this  policy  no  greater  proportion  of  the  loss 
sustained  than  the  sum  hereby  insured  bears  to  the  whole 
amount  insured  thereon."  Substantially  the  New  York  stand- 
ard policy  limitation  clause  is  the  same  only  as  is  usual  in  the 
New  York  form,  it  is  more  explicit  and  goes  further  into  details 
in  defining  the  nature  and  extent  of  this  liability.  This  makes 
the  entire  blanket  insurance  assessible  on  its  full  face  for  con- 
tribution for  loss  on  any  one  of  the  properties  to  which  it  may 
apply. 


Average  Clause  is  One  of  Distribution  and  Limitation; 
Co-insurance  One  of  Limitation  Only. 

To  me,  it  seems  clear  that  the  average  clause  is  a  clause 
of  both  distribution  and  limitation;'  of  distribution  in  that 
it  opportions  the  amount  of  insurance  that  is  applicable  to  any 
particular  subject;  and  of  limitation  in  that,  by  this  distribu- 
tion, it  states  just  what  portion  of  the  total  policy  can  be  assessed 
in  one  loss.  While  the  co-insurance  clause  is  purel}^  a  clause 
of  liability  limitation,  in  that  it  fixes  definitely  the  amount 
for  which  the  insuring  company  can  be  liable  with  reference 
to  conditions  of  sound  value,  loss  and  amount  of  insurance 
carried.  This  almost  always  causes  the  blanket  insurance  to 
suffer  where  there  are  both  specific  and  blanket  policies  cover- 
ing on  the  same  group  of  properties  and  only  a  portion  of  the 
group  is  damaged  by  a  fire. 

Another  form  of  so-called  average  clause  in  use,  especially 
in  connection  with  lumber  insurance,  reads  as  follows: 


164 

"It  is  understood  and  agreed  that  no  claim  under  this  policy  shall 
be  for  a  greater  proportion  of  the  whole  loss  or  damage  to  the  property 
insured  thereby,  than  the  amount  insured  thereby  shall  bear  to  the  whole 
value  of  the  property  insured  at  the  time  of  the  fire." 
This  form  of  average  clause  may  be  said  to  also  possess  certain 
of  the  limitation  features.  In  fact,  in  its  effect  on  the  recovery 
at  the  time  of  a  loss  it  would  operate  in  much  the  same  way  that 
a  three-quarters  value  clause  would,  although  based  on  a  dif- 
ferent principle. 

Essential  Features  of  Co-insurance. 

The  co-insurance  clause  is  vastly  more  essential  to  proper 
underwriting  than  the  majority  of  the  people  using  it  begin  to 
realize.  Possibly,  a  word  or  two  in  justification  to  this  clause 
may  not  be  amiss  here,  since  it  is  the  subject  of  such  general 
criticism.  That  it  is  a  necessity  is  evidenced  by  the  fact  that 
a  good  many  years  ago  in  England,  an  act  was  passed  by  which 
parties  taking  out  insurance  were  obliged  to  place  a  fixed  amount 
upon  each  separate  building  or  contents  itemized,  or  where 
the  fixing  of  such  an  amount  was  not  practicable  an  account 
of  the  stock  being  of  a  movable  character,  changing  its  location 
from  time  to  time,  or,  if  from  any  other  cause,  and  the  insur- 
ance was  in  one  sum  over  all,  the  insured  in  such  cases  was  only 
to  recover  pro  rata  for  any  damage  in  the  proportion  that  the 
insurance  on  the  damaged  property  at  the  time  of  the  fire,  bore 
to  the  whole  value  of  the  insured  property.  It  is  nearly  one 
hundred  years  since  this  position  was  taken  up  and  legalized 
by  English  statute,  but  you  can  see  that  it  recognized  the  princi- 
ple that  there  was  a  relation  between  insurance  carried  and 
sound  value  of  property  covered,  that  must  be  to  some  extent, 
a  definitely  fixed  relation  in  order  to  have  the  business  of  under- 
writing placed  upon  a  sound  economic  basis,  and  to  enable 
insurers  to  know  what  to  charge  for  their  policies. 

Quite  a  common  opinion  among  policyholders  regarding 
co-insurance,  you  know,  is  that  it  is  unreasonable  and  unjusti- 
fiable and  that  if  we  are  willing  to  insure  a  man  for  $1,000  it 
should  make  no  difference  whatever,  to  us  whether  the  property 
that  we  insure  him  against  the  loss  of  was  worth  $1,000  or 
$5,000  or  $10,000.  This  is  the  popular  argument  against  co- 
insurance, the  assured  off  times  maintaining  that  it  should  make 
no  difference  to  us  if  we  are  willing  to  run  $1,000  worth  of  risk 
on  his  property,  as  to  what  the  value  of  that  property  was  so 
long  as  under  anything  but  a  valued  policy,  there  was  at  least 
$1,000  worth  of  it  in  existence.  But  think  a  moment.  In  the 
case  of  a  $5,000  property  with  $1,000  thereon,  and  a  20%  property 
loss,  there  is  a  total  loss  for  the  company;  in  the  case  of  $10,000 
property  value  with  the  same  $1,000  insurance  thereon  and 
a  10%  loss,  a  total  loss  for  the  company  again.  In  other  words, 
since  the  great  majority  of  losses   (probably  upwards  of  90% 


165 

of  them)  are  not  total  losses,  and  among  this  90%  of  partial 
claims  are  losses  ranging  everywhere  from  fractions  of  1% 
up  to  99%  of  the  value  of  the  insured  property,  the  great  majority 
of  them  being  under  10%  or  at  the  most  20%  in  extent,  the 
company  writing  a  small  line  such  as  we  have  spoken  of  on  a 
property  of  high  value,  stands  liable  in  the  great  majority  of 
the  losses  that  may  occur  to  have  them  prove  total  losses  rather 
than  partial  ones.  To  take  the  illustration  of  a  property  in- 
sured for  10%  of  its  value,  there  is  vastly  more  than  ten  times 
the  likelihood  that  the  company  will  sustain  a  total  loss  than 
there  would  be  if  the  assured  was  carrying  insurance  up  to 
approximately  the  value  of  the  property  covered. 

Another  pet  argument  advanced  by  people  who  object 
to  the  co-insurance  clause  is,  for  illustration,  "Why,  I  am 
perfectly  willing  to  carry  half  my  risk  myself."  After  many 
years  of  experience,  and  many  times  asking  the  assured,  "Well, 
in  that  event,  suppose  half  your  risk  burns,  whose  half  is  it, 
yours  or  the  insurance  company's?  His  answer  invariably 
has  been,  "The  insurance  company's  of  course."  Does  it  require 
any  very  keen  logic  to  show  that  a  position  like  that  absolutely 
refutes  the  idea  of  the  assured  carrying  half  of  the  risk  himself. 
Only  would  such  a  defined  position  on  his  part  be  lived  up  to 
if  he  were  ready  to  agree  that  half  of  every  loss  sustained  should 
be  born  by  him,  and  the  other  half  paid  by  the  insuring  company. 
Were  the  assured  willing,  as  a  general  proposition,  to  have  a 
clause  defining  such  an  apportionment  as  this  attached  to  the 
policies,  I  have  but  little  doubt  but  what  the  insurance  companies 
would  very  gladly  accede  to  it,  and  that  the  fire  waste  of  the 
country  would  be  reduced  by  a  very  large  amount. 

The  only  way  to  secure  a  provision  of  this  nature  in  the 
policy  and  to  oblige  the  assured  to  live  up  to  an  agreement  to 
carry  part  of  his  risk  himself  in  fact  as  well  as  in  name,  is  to 
so  draft  the  contract  that  for  a  certain  consideration  granted 
by  the  insuring  company,  the  assured  agrees  to  carry  insur- 
ance to  an  amount  bearing  a  certain  fixed  relation  to  the  value 
of  the  property  insured  under  the  policy  at  the  time  of  the  fire. 
This  means  that  the  insured  becomes  an  insurer  of  his  own 
property  in  case  he  has  not  taken  out  sufficient  insurance  to 
reach  the  proportion  of  his  sound  value  called  for  by  the  con- 
tract;   in  other  words,  he  becomes  a  "co-insurer." 

The  consideration  granted  by  the  insuring  company  for 
the  attachment  of  a  clause  warranting  this  condition,  is  a 
material  reduction  in  the  rate.  Hence,  all  co-insurance  or 
reduced  rate  clauses  commence  with  the  words,  *Tn  considera- 
tion of  the  reduced  rate  at  which  this  poHcy  is  written." 

Then  follows  the  reason  why  this  reduced  rate  is  granted 
stated  in  these  words,  "It  is  expressly  stipulated  and  made  a 
part  of  this  contract  that  in  event  of  loss  this  company  shall 
be  liable  for  no  greater  proportion  thereof  than  the  amount 


166 

hereby  insured  bears  to  —  per  cent,  of  the  actual  value  of  the 
property  described  herein  at  the  time  when  such  loss  shall 
happen.  This  you  note  is  practically  an  agreement  or  warrant 
on  the  part  of  the  assured  to  carry  the  specified  proportion  of 
the  value  of  his  property  in  insurance.  But  it  does  not  stop 
there,  for  it  further  stipulates  that  only  such  proportion  of  his 
loss  as  is  represented  by  the  ratio  existing  between  the  amount 
of  insurance  carried  by  any  company  and  this  specified  per- 
centage of  the  value  of  the  insured  property  can  be  collected 
from  that  company.  The  working  of  this  ratio  is  to  call  for 
a  total  contribution  by  the  insuring  companies  whenever  there 
is  short  insurance  and  a  loss  greater  than  the  specified  per 
cent,  of  the  property  value.  The  operation  of  the  clause  is 
not  altered,  but  no  saving  is  effected  by  its  attachment. 

The  5%  Provision  of  the  Co-insurance  Clause. 

The  final  provision  of  the  co-insurance  clause  is  one  that 
is  often  misinterpreted.  I  refer  to  the  so-called  5%  item.  The 
portion  of  the  clause  regarding  this  reads:  "If  the  aggregate 
claim  for  any  loss  shall  not  exceed  5%  of  such  actual  value  no 
special  inventory  or  appraisement  of  the  undamaged  property 
shall  be  required." 

Frequently  inexperienced  adjusters  interpret  this  as  mean- 
ing that  with  losses  of  less  than  5%  of  the  actual  sound  value, 
this  phrase  will  waive  the  main  provision  of  the  co-insurance 
clause,  that  which  makes  the  insured  a  contributor  to  his  own 
loss  if  he  is  short  of  the  required  percentage  of  insurance.  This 
is  not  so,  the  clause  clearly  makes  no  waiver  of  this  sort  and 
a  1%  or  a  5%  loss  is  as  fully  subject  to  the  working  of  the  clause 
as  one  of  greater  amount.  Its  object  is  simply  to  do  away  with 
the  requiring  of  a  detailed  inventory  or  appraisement  in  case 
of  very  small 'claims  which  might  otherwise  be  required. 

The  Blind  and  Expensive  Attitude  of  State 
Governments. 

It  would  seem  singular,  were  it  not  for  the  fact  that  state 
legislatures  have  over  and  over  again,  evidenced  their  inability 
to  understand  insurance  problems,  that  certain  of  the  states, 
absolutely  prohibit  any  policy  of  insurance  covering  property 
in  such  state  which  shall  contain  any  provision  requiring  the*- 
assured  to  take  out  any  specified  amount  of  insurance  with 
respect  to  the  value  of  his  property,  or  that  shall  render  him 
liable  by  co-insurance  in  the  event  of  his  not  taking  out  a  suf- 
ficient amount  of  insurance.  Such  action  on  the  part  of  any 
state  necessarily  increases  the  cost  of  insurance  to  the  people 
of    the    state. 


167 

The  Reason  for  Co-insurance. 

Now  what  are  some  of  the  real  reasons  why  the  co-insur- 
ance clause  is  such  an  essential  factor  in  the  business?  It  is 
absolutely  necessary  that  underwriters  should  have  a  sufficient 
amount  of  insurance  with  respect  to  the  value  of  the  property 
covered,  to  avoid  the  continual  payment  of  what  are  in  reality 
only  damages,  or  partial  losses,  but  which  in  effect  owing  to 
short  insurance,  would  become  total  losses.  On  no  other  basis 
than  that  of  a  fixed  relation  between  insurance  carried  and 
the  sound  value  of  the  property  insured  is  it  possible  for  the 
cost  of  insurance,  or  that  is,  the  rate,  to  be  determined  with 
any  fair  amount  of  accuracy.  It  would  be  obviously  unjust 
to  a  man  who  was  carrying  insurance  to  the  extent  of  90%  or 
100%  of  the  value  of  his  property  to  ask  him  to  pay  the  same 
price  per  dollar  for  such  insurance,  as  his  neighbor,  the  owner 
of  precisely  identical  property  both  in  value  and  physical  con- 
dition, but  who  only  carried  half  as  much  insurance,  since  the 
risk  to  the  companies  in  the  former  case,  is  reduced  over  one- 
half  from  what  it  is  in  the  latter. 

It  is  just  as  essential,  in  order  to  properly  assess  the  cost 
of  insurance,  that  is,  to  fix  the  tax  or  rate  that  the  companies 
must  receive  in  order  to  collect  funds  sufficient  to  carry  on 
their  business,  that  the  relation  of  insurance  to  value  should 
be  considered  as  well  as  that  the  various  physical  features 
of  the  insured  property  that  enter  into  the  original  making 
up  of  the  rate.  We  all  know  by  experience,  that  a  low  rate 
with  a  proper  co-insurance  clause,  is  in  the  long  run  more  profi- 
table than  a  materially  higher  rate  and  absence  of  the  co-insur- 
ance clause  and  a  consequent  light  carrying  of  insurance. 

It  has  often  seemed  to  me,  that  the  opponents  of  the  co- 
insurance principle  were  men  who,  to  put  it  plainly,  were  pre- 
pared to  kick  because  they  didn't  receive  something  that  they 
hadn't  paid  for.  Really,  this  crude  description  sums  it  all  up. 
Objectors  to  co-insurance  are  mainly  men  who  saw  fit  to  carry 
a  part  of  the  risk  themselves,  as  they  were  pleased  to  term  it, 
up  to  the  time  when  a  loss  occurred,  then  they  immediately 
abandon  the  idea  that  they  are  in  any  way  responsible  and 
insist  that  the  insuring  company  should  pay  them  for  something 
that  they  had  not  bargained  for,  in  the  first  place.  From  any 
point  of  view  the  co-insurance  principle  is  a  right  one,  not  only 
from  the  standpoint  of  the  insurance  companies,  since  it  defends 
them  from  an  excessive  number  of  total  losses  and  enables 
them  to  determine  more  accurately  the  cost  price  of  their  com- 
modity, but  the  fair  minded  policyholder  should  also  regard 
it  as  a  friendly  clause;  friendly  to  his  interest,  since  it  works 
distinctly  against  the  speculative  and  avaricious  claimant, 
whose  action  causes  an  added  burden  for  the  insurance  com- 
panies and  thereby  increases  the  cost  price  of  insurance  to  the 
community  as  a  whole. 


168 

Comments  on  the  Co-insurance  Principle. 

It  is  intersting  to  note  the  way  in  which  the  co-insurance 
principle  appears  to  educated  men  who  have  had  no  actual 
experience  in  the  insurance  business,  since  it  brings  out  an 
unbiased,  logical  presentation  of  the  situation.  I  am  glad  to 
take  this  opportunity  to  quote  from  several  short  essays  that 
were  written  by  members  of  the  fire  insurance  class  in  the 
graduate  school  of  business  administration  of  Harvard  Uni- 
versity during  recent  years.  These  extracts  are  from  five 
different  essays  that  were  presented  on  the  co-insurance  clause. 
They  are  not  presented  in  full,  but  the  more  important  portions 
of  them  are  as  follows: 

"The  Co-Insurance  principle  is  absolutely  necessary  to  secure 
justice  between  property  owners,  and  to  enable  the  company  to  collect 
premiums  from  all  commensurate  with  the  risk  assumed.  It  is  a  well 
known  fact  that  in  cities  with  good  fire  protection  only  about  one  out  of 
every  twenty-five  fire  losses  is  a  total  one,  many  of  the  remaining  losses 
being  only  nominal  in  amount. 

"The  Co-Insurance  Clause  provides  that  every  property  owner 
shall  have  his  losses  paid  only  in  the  proportion  that  he  is  willing  to  pay 
premium. 

"Fire  insurance  is  a  tax  paid  by  all  the  property  owners  of  the 
community  for  the  purpose  of  indemnifying  unfortunate  losers.  In  form 
it  resembles  a  general  property  tax,  except  that  it  is  collected  and  disbursed 
by  private  companies  instead  of  by  the  government.  As  the  government 
tax,  to  be  equitable  is  paid  by  the  owners  of  property  in  proportion  to 
the  value  of  the  same,  so  the  fire  insurance  tax,  to  be  equitable  should 
also  be  based  upon  the  value  of  the  property  owned. 

"The  Co-Insurance  Clause  protects  the  small  property  owners 
against  the  efforts  of  the  great  industrial  and  mercantile  corporations 
to  shirk  the  payment  of  their  just  share  of  premiums.  In  most  large 
mercantile  plants  the  property  is  so  situated  in  different  localities  each 
separate  from  the  other  or  by  fireproof  walls  that  in  a  great  majority 
of  cases,  the  fire  can  be  easily  confined  and  under  such  circumstances  a 
total  loss  is  hardly  to  be  expected.  Therefore  the  large  concerns  could 
protect  themselves  against  fire  loss  by  insuring  a  portion  of  their  value, 
while  a  small  concern  would  have  to  insure  for  nearly  full  value  for  equal 
protection.  The  only  argument  I  can  see  against  the  use  of  the  Co-Insu- 
rance Clause  is  that  a  property  owner  insuring  for  a  small  percentage  of 
his  value  may  claim  that  in  event  of  total  loss  he  is  taking  a  large  pro- 
portion of  the  risk  himself  and  therefore  in  event  of  a  small  loss  should 
be  paid  in  full.  If  his  property  was  so  situated  that  in  event  of  a  fire  the 
entire  property  would  be  seriously  endangered  a  claim  like  this  would 
be  just  and  there  is  no  doubt  but  what  the  moral  hazard  would  be  O.  K. 
as  the  owner  would  naturally  take  all  precautions  to  guard  against  pos- 
sible loss. 

"Fire  insurance  is  a  tax  and  like  all  taxes  should  be  assessed  in 
proportion  to  the  value  of  the  property  protected  by  it.  The  absence  of 
co-insurance  makes  it  possible  for  the  large  corporations  and  the  property 
owner  who  wants  to  keep  a  small  insurance  to  take  advantage  of  the 
small  property  owner  who  will  not  take  the  risk  of  only  partly  insuring 
his  property.  Experience  has  shown  that  the  fire  loss  averages  around 
60  per  cent,  of  the  premiums  collected,  and  those  premiums  must  be 
collected  if  the  insurance  company  is  to  do  business.  If  the  large  corpora- 
tions will  not  pay  them,  the  obligation  falls  upon  the  scrupulous  property 
owner,  which  is  manifestly  unfair.  The  co-insurance  clause  (New  York 
policy)  provides  that  the  company  shall  not  be  liable  for  a  greater  pro- 


169 

portion  of  loss  than  the  amount  of  the  insurance  bears  to  the  per  cent, 
of  actual  value  of  the  property.  Most  of  the  losses  are  comparatively 
small  in  amount,  not  being  over  $100  or  $200.  Without  co-insurance 
people  would  only  take  insurance  to  a  small  amount,  the  companies  would 
have  to  pay  all  losses  in  full  and  many  would  be  forced  to  the  wall.  For 
instance:  two  people  each  own  buildings  worth  $10,000  one  insuring  for 
$8,000  and  the  other  for  $2,000  the  rate  being  the  same  in  both  cases. 
If  each  suffers  a  loss  of  $2,000  they  are  both  paid,  but  one  has  been  taxed 
four  times  as  much  as  the  other,  and  has  received  no  more.  Thus  it  is 
seen  that  co-insurance  protects  the  interests  of  the  man  who  is  unwilling 
to  take  the  risk  of  partial  insuranc.e.  In  the  case  mentioned,  the  man  in- 
suring for  $2,000  should  be  allowed  to  collect  only  one-fourth  of  his  loss 
or  $500. 

"The  owner  of  property  is'  not,  however,  always  obliged  to  carry 
80%  insurance.  He  may  carry  less,  but  he  must  pay  a  higher  graded 
premium.    Co-Insurance  also  decreases  the  moral  hazard. 

"The  only  objections  that  can  be  raised  against  Co-Insurance  are 
that  it  puts  an  obligation  on  the  insurer  to  carry  a  certain  amount  of 
insurance,  and  where  the  80%  Co-Insurance  Clause  is  the  practice,  it 
makes  it  impossible  for  the  property  owner  to  secure  full  indemnity  in 
case  of  complete  loss.  The  first  of  these  objections  has  been  practically 
removed  by  the  graded  premium.  The  second  will  appeal  chiefly  to 
unscrupulous  property 'owners." 

"The  foremost  argument  in  favor  of  the  adoption  of  the  Co-Insurance 
Clause  is  that  it  is  in  accordance  with  the  law  of  average  which  is  the  basic 
principle  of  insurance.  If  the  principle  were  adopted  that  every  one 
must  insure  his  property  to  a  certain  proportion  of  its  actual  cash  value 
or  receive  in  case  of  loss  only  such  proportion  of  the  loss  as  the  amount 
insured  bears  to  the  full  value  of  the  property,  then  the  ratio  of  losses  to 
amounts  written  or  to  premiums  in  a  certain  class  would  be  a  reliable 
basis  from  which  an  average  rate  would  be  justly  and  correctly  arranged. 
No  one  assured  would  receive  any  greater  protection  for  each  dollar  of 
value  assured  than  any  other.  Yet  under  the  present  conditions,  that. is 
where  the  Co-Insurance  Clause  is  in  only  partial  use;  the  losses  in  its 
absence  are  in  larger  proportion  to  premiums  and  values  insured  and  the 
cost  of  insurance  is  increased  to  those  who  carry  full  or  nearly  full  insurance, 
whereas  the  cost  is  reduced  for  those  who  insure  but  a  part  of  their  prop- 
erty and  yet  get  protection  up  to  the  full  amount  insured. 

"Manifestly  this  arrangement  of  the  insurance  tax,  for  it  is  virtually 
a  tax,  is  unfair.  The  cost  of  insurance  is  just  as  much  a  tax  as  is  that  levied 
by  the  government  on  property.  And  does  the  government  allow  the 
citizen  to  pay  on  just  what  proportion  of  his  total  property  he  desires  to? 
Certainly  not. 

"Suppose  for  the  sake  of  illustration,  the  assessment  system  of 
levying  taxes  were  abolished.  Now  "A"  decides  to  pay  taxes  on  75%  of 
his  property,  "B"  on  50%  and  so  on.  The  equality  of  taxation  would  be 
absolutely  destroyed  and  the  government  could  get  no  idea  of  how  much 
to  make  the  tax  rate  in  order  to  raise  the  necessary  funds.  And  the  cause 
of  insurance  is,  precisely  analogous  to  this. 

"Were  insurance  conducted  by  the  government,  it  would  very 
quickly  be  true  that  losses  and  expenses  would  be  assessed  against  the 
insurance  tax  payer  in  precisely  the  same  manner  as  taxes,  that  is,  upon 
the  full  assessed  value  of  property  so  protected. 

"The  fact  that  such  an  immense  corporation  as  the  United  States 
Steel  Co.  objected  to  the  co-insurance  stipulation  when  it  insured  in 
private  companies  yet  when  insuring  its  own  property  demanded  that 
each  plant  contribute  to  the  general  fund  in  proportion  to  the  full  value 
of  that  plant,  showed  that  they  recognized  clearly  the  principle  of  Co- 
Insurance  and  appreciated  its  value. 

"The  probable  effect  of  the  adoption  everywhere. of  the  Co-Insurance 
principle  is  also  a  strong  argument  in  favor  of  its  use. 


170 

"In  two  ways  the  average  rate  would  be  reduced.  First,  because 
larger  sums  would  be  paid  the  companies  for  premiums  and  thus  the 
average  loss  rate  would  be  reduced;  second,  because  in  many  cases  the 
liability  of  the  companies  would  be  reduced." 

"To  my  mind  the  arguments  in  favor  of  "Co-Insurance"  clauses  are 
far  more  convincing  than  those  against  it.  Personally,  I  believe  the 
"Co-Insurance"  or  "Reduced  Rate"  Clause  to  be  a  benefit  to  the  com- 
munity at  large.  These  are  my  reasons.  In  a  previous  lecture  we  learned 
that  the  "Loss  Cost"  of  an  insurance  company  is  the  amount  that  burns 
for  every  $100  insured;  or  better,  it  is  the  ratio  between  the  amount 
burned  and  the  amount  insured.  In. the  same  lecture  we  learned  that 
the  "Loss  Ratio"  of  an  insurance  company  is  the  ratio  between  the  losses 
incurred  and  the  premiums  received.  Now  it  is  not  difficult  for  one  looking 
at  the  "Co-Insurance"  Clause  to  realize  that  if  it  were  strictly  lived  up 
to,  both  the  "Loss  Cost"  and  the  "Loss  Ratio"  of  the  insurance  companies 
would  tend  to  diminish,  because  the  companies  would  be  writing  larger 
policies,  thereby  receiving  larger  premiums  and  consequently  the  ratios 
would  be  smaller.  This  will  be  clearer  when  we  realize  that  insurance 
losses  are  governed  by  the  law  of  average.  It  is  not  logic  to  maintain 
that  the  amount  of  losses  in  a  community  increase  proportionately  with 
the  gross  amount  of  insurance  written  in  that  community.  Therefore, 
since  the  basis  of  the  premium  rates  is  determined  from  the  average  loss 
cost  of  the  different  classes  of  risk,  the  rates  for  insurance  would  tend  to 
be  lower  and  the  insuring  public  would  in  the  long  run  be  the  benefiting 
party  of  this  insurance  contract." 

You  will  note  that  the  view-point  taken  by  the  writers 
of  the  papers  just  quoted  is  in  several  instances  strikingly- 
original,  but  none  the  less  logical  and  convincing. 

The  Operation  of  the  Co-insurance  Clause. 

I  have  assumed  that  you  all  know  the  phraseology  and 
the  working  of  co-insurance  clause  so  fully  that  it  is  not  neces- 
sary for  us  to  dwell  on  either  of  those  points  at  this  time.  The 
term  "full  co-insurance"  is  used  where  100%  is  carried,  that 
is  where  the  total  insurance  is  practically  the  same  as  the  value 
of  the  property  insured.  Percentage  co-insurance  clauses, 
usually  either  80%  or  90%  mean  that  the  insurance  carried 
is  agreed  to  be  either  80%  or  90%  of  the  sound  value  of  the 
insured  property.  The  operation  of  this  clause  in  the  event 
of  loss  is  more  a  matter  of  loss  adjustment  and  apportion- 
ment, than  of  a  discussion  of  the  clause  itself. 

Where  properties  are  under  good  public  protection  and 
in  consequence  there  is  a  less  chance  of  total  losses  resulting, 
the  presence  of  a  co-insurance  clause  is  of  the  greatest  impor- 
tance. Where  properties  are  entirely  outside  of  protection, 
and  where  losses  are  nearly  all  total,  it  is  not,  of  course,  as 
important  a  matter  since  the  operation  of  the  clause  in  the  event* 
of  a  total  loss  always  gives  the  claimant  the  face  of  the  policy 
unless  same  exceeds  the  loss  sustained. 

With  sprinklered  risks  where  the  vast  preponderance  of 
the  losses  are  of  relatively  small  amounts  when  contrasted 
with  the  total  insurance  involved,  owing  to  the  loss  reducing 
effect  of  the  sprinkler  system,  a  higher  percentage  of  insurance 


171 

with  respect  to  value  is  essential  and  therefore,  a  clause  guaran- 
teeing 90%  or  even  100%  of  the  sound  value  is  almost  invariably 
issued. 


Guaranteed  Amounts  in  Lieu  of  Co-insurance. 

In  some  cases,  a  guaranteed  amount  of  insurance  is  speci- 
fied by  a  clause  attached  to  the  policies  in  place  of  a  percentage 
amount.  There  are  reasons  both  for  and  against  this  practice. 
Its  favorable  features  are  especially  apparent  to  the  assured, 
since  it  reduces  materially  the  element  of  doubt  as  to  what 
the  actual  value  of  the  insured  property  will  be  considered. 
You  will  note  that  we  say  "reduces"  this  element  of  doubt. 
It  does  not  entirely  remove  it  as  is  often  assumed  to  be  the  case. 
If  at  the  time  of  a  loss,  it  were  found  that  the  property  was 
actually  of  less  value  than  the  guaranteed  amount  of  insurance, 
a  sum  in  excess  of  this  actual  value  would  be  no  more  collectible 
with  a  guaranteed  amount  of  insurance  than  would  be  secured 
under  the  operation 'of  the  co-insurance  clause  itself.  Guaran- 
teed amounts  of  insurance  do  not  make  the  policy  a  "valued" 
contract.  The  objections  to  using  this  clause  are  fluctuations  in 
value  and  also  the  fact  that  it  can  only  be  admissible  where  a 
formal  appraisal  by  disinterested  and  competent  experts  has  been 
made  in  order  to  determine  the  sound  value  of  the  property 
and  from  that,  to  fix  the  "guaranteed"  amount  of  insurance 
that  shall  be  carried.  There  is  always  difficulty  and  expense 
attendant  upon  the  securing  of  dependable  estimates  of  this 
sort,  and  as  we  have  just  stated,  the  appreciation  or  depre- 
ciation of  property  that  time  is  sure  to  bring  about  especially 
if  the  appraisal  is  one  of  mxany  years  standing,  will  result  in 
leaving  the  assured  either  short  of  needed  insurance  or  have 
caused  him  to  be  at  the  expense  of  carrying  more  than  he  needed. 
It  is  objectionable,  too,  in  that  for  a  possible  benefit  to  the 
few  who  have  losses,  it  adds  to  the  cost  of  insurance  to  the  com- 
munity as  a  whole. 


Average  and  Co-insurance  Together. 

The  question  is  sometimes  raised  as  to  what  is  the  effect 
on  a  policy  where  both  the  average  clause  and  the  co-insurance 
clause  are  attached,  some  seeming  to  think  that  one  does  away 
with  the  other  and  that  complication  is  likely  to  result.  Under 
the  conditions  of  the  average  clause,  the  policy  becomes  specific 
and  the  co-insurance  clause  is  as  applicable  to  a  specific  policy 
as  to  one  of  a  blanket  or  compound  nature,  the  procedure  there- 
fore, is  make  the  policy  specific  according  to  the  provisions  of 
the  average  clause  and  then  apply  the  co-insurance  clause 
to  these  various  specific  items  separately. 


172 

Non-concurrencies. 

Many  of  the  most  embarrassing  non-concurrencies  that 
develop  in  connection  with  loss  settlements  are  due  to  the 
presence  of  either  average  or  co-insurance  clauses,  on  some 
of  the  policies  and  their  absence  on  others.  The  questions  that 
arise  under  this  condition  are  ones  that  can  be  more  intelli- 
gently treated  in  a  discussion  of  losses  and  adjustments,  but 
it  will  not  be  amiss  here  to  state  that  it  seems  very  desirable 
that  insurance  companies  should  get  together  over  this  and 
adopt  a  universal  clause  to  be  used  on  all  policies  stating  the 
procedure  to  be  followed  in  the  event  of  non-concurrencies, 
either  from  the  condition  such  as  we  have  just  described  or 
those  that  arise  from  other  variations  in  description  of  property 
or  clause  attachments  to  the  policy.  Our  British  brethren 
have  to  a  large  extent  done  away  with  this  difficulty  that  we 
so  frequently  are  forced  to  confront  by  adopting  what  they 
are  pleased  to  term,  the  "second  condition  of  average." 


PART  II 


Fire  Hazards — Tanneries 

BY 

BENJAMIN  RICHARDS 
Sut)erinten<3ent  oi  Surveys,  Underwriters'  Bureau  of  New  England 

Introduction. 

In  considering  the  so-called  special  hazards  from  a  fire 
insurance  point  of  view  we  must  use  care  not  to  become  so 
absorbed  in  the  interesting  processes  and  particular  hazards 
of  the  industry  as  to  lose  sight  of  the  common  every  day  and 
general  causes  of  fire. 

If  we  are  hiring  a  man  for  a  particular  work  we  look  care- 
fully into  his  technical  or  business  knowledge  and  experience 
as  demanded  by  the  position  he  is  to  fill,  but  when  it  comes 
to  the  actual  selection  of  the  man  the  factors  which  govern 
the  decision  are  quite  likely  to  be  the  old  fundamentals,  industry, 
honesty,  tact,  common  sense.  So  in  selecting  our  lines  on  the 
industries  which  we  classify  as  special  hazards,  while  not  at 
all  neglecting  the  details  of  the  arrangement  and  hazards  of 
the  processes,  we  must  finally  record  our  judgment  by  the 
consideration  of  the  four  fundamentals  of  fire  prevention, 
construction,  occupancy,  protection  and  exposure. 

Old  rating  schedules  are  notoriously  rich  in  charges  for 
particular  hazards  which  came  into  being  through  an  unfortu- 
nate, often  limited,  experience  of  some  one  or  two  companies 
in  days  long  past. 

If  we  try  to  gauge  the  relative  danger  of  these  hazards  by 
a  study  of  the  schedule  we  are  quite  likely  to  find  that  they 
do  not  square  with  the  actual  fire  record.  In  the  particular 
tannery  schedule  I  have  here  there  is  a  charge  for 
buffing,  if  in  the  main  building,  of  45  to  55  cents  and  a  charge, 
under  construction,  of  10  cents  for  a  shingled  roof.  The  actual 
fire  record  in  a  period  of  over  ten  years  indicates  that  these 
charges  more  properly  could  be  actually  reversed. 

Losses  in  the  manufacturing  or  special  hazard  risks  may 
be  classed  in  two  principal  divisions  which  for  lack  of  better 
names  I  shall  call  serious  losses  and  expected  losses. 

Serious  losses  result  from  a  defect  in  one  or  more  of  the  funda- 
mentals, construction,  occupancy,  protectio7i,  exposure.  Such 
losses  usually  govern  the  profit  and  loss  account  on  any  particu- 
lar class  if  written  widely  for  a  long  period.     It  matters  little 


what  particular  process,  or  so-called  special  hazard,  of  the 
plant  may  start  a  fire,  the  real  cause  of  a  large  loss  is  always 
either  poor  construction,  poor  occupancy,  poor  protection, 
an  overpowering  exposure  or  a  combination  of  these  evils. 
One  such  "serious  fire"  may  result  in  a  loss  exceeding  that  of 
the  sum  of  all  the  "special  hazard"  fire  losses  which  the  risk 
might  suffer  during  its  entire  experience.  These  facts  should 
be  kept  in  mind  in  considering  the  "special  hazards"  as  fire 
risks.  In  all  our  interesting  wanderings  into  the  details  of 
manufacturing  processes  let  us  ever  remember  that  they  are 
all  less  important  than  the  big  four  of  fire  prevention,  construc- 
tion, occupancy,  protection  and  exposure. 

Expected  losses  are  those  resulting  from  the  special  hazards; 
the  peculiarly  dangerous  processes  or  conditions  incident  to 
the  particular  risk.  They  are  foreseen  by  both  the  assured 
and  the  underwriter,  usually  guarded  by  the  assured  to  such 
an  extent  as  to  safeguard  his  business  against  serious  interrup- 
tion and  expected  by  the  underwriter  to  occur,  not  in  such 
volume  as  to  destroy  his  estimated  profit.  Very  often  these 
special  hazard  losses  are  so  small  individually  as  to  appear 
unimportant,  yet  they  recur  with  such  persistent  regularity 
that  one  is  apt  to  see  his  anticipated  profit  Hterally  "go  up  in 
smoke,"  especially  if  measured  against  some  of  the  rates  now 
so  popular  in  certain  localities.  We  are  fortunate  if  we  have 
the  opportunity  of  covering  such  losses  by  gains  from  other 
more  profitable  classes  asis  possible  in  some  organizations  special- 
izing on  industrial  risks.  . 

Of  course,  occasionally  there  will  be  large,  if  not  serious, 
fires  under  the  special  hazards  where  the  fundamentals,  con- 
struction, occupancy,  protection  and  exposure,  do  not  cause  the 
large  loss,  as  also  there  will  be  some  small  recurring  fires  where 
defects  in  the  fundamentals  cause  the  fires  and  the  special 
hazards  are  not  a  factor,  but  such  fires  are  not  the  usual  type 
from  which  general  conclusions  may  be  deduced. 

The  success  of  the  underwriter  in  writing  industrial  risks 
is  measured  by  his  skill  in  estimating  the  losses  under  the 
"expected"  fires,  the  probability  of  the  "serious"  fires  and 
the  likelihood  of  the  special  hazard  fire  becoming  a  serious 
fire.  So  we  study  the  industries  not  only  to  learn  the  processes 
and  operations  conducted  within  their  rooms,  but  we  con- 
sider also  the  habits  of  the  trades,  their  prejudices,  manner  of 
housing,  character  of  employees  and  management,  the  atten- 
tion given  to  the  fire  hazards  of  the  business,  the  protective 
apparatus  and  the  location  and  general  appearance  of  the  plants. 

An  underwriter's  interests  may  be  assumed  to  stop  with 
a  careful  weighing  of  the  relative  importance  of  all  these  things 
necessary  to  judge  the  risk  as  a  business  proposition,  yet  it 
is  well  to  study  the  details  of  the  various  industries  as  occasion 
permits.     They  are  all  extremely  interesting  and  a  knowledge 


of  them  cannot  fail  to  result  in  increasing  our  efficiency.  An 
agent  or  broker  is  particularly  able  to  serve  his  client  if  well 
informed  as  to  the  conduct  of  his  factory  and  an  examiner 
will  be  able  to  save  much  time  if  he  recognizes  the  processes 
as  reported  and  does  not  have  to  look  up  the  terms  and  hazards 
to  properly  interpret  inspection  reports. 

Our  present  subject,  Tanneries,  furnishes  an  especially 
interesting  record  relative  to  the  special  hazard  and  the  serious 
fires.  A  compilation  which  I  made  in  1912,  of  the  National 
Fire  Protection  Association  fire  record  shows  approximately 
50%  of  all  tannery  fires  as  originating  from  the  special  hazards, 
yet  unquestionably  the  real  causes  of  practically  all  the  total 
and  large  losses  were  poor  construction  and  lack  of  protection. 
The  special  hazard  fires  in  nearly  all  of  these  cases  could  have 
been  readily  stopped  were  the  ordinary  means  of  protection 
at  hand  or  had  there  been  ho  unprotected  floor  openings  or  other 
fundamental  defects  in  construction  present  to  permit  the 
spread  of  the  fire  to  serious  proportions. 

The  unpleasant  'aroma  of  tanneries  has  some  relation  to 
their  fire  losses,  as  it  has  often  necessitated  their  erection  in 
isolated  places  beyond  the  reach  of  public  water  supplies  and 
fire  departments.  The  unclean  conditions  usually  found  in 
old  style  tanneries  have  not  encouraged  the  erection  of  well 
constructed  buildings,  as  there  need  be  no  rooms  crowded  with 
employees  and  there  is  little  delicate  machinery  to  house. 

The  replacing  of  many  of  the  old  hand  processes  by  machines, 
the  changes  in  the  character  of  the  labor  brought  about  by  the 
introduction  of  machinery  and  the  substitution  of  chemicals 
for  some  of  the  offensive  agents  formerly  essential  to  tanning 
are  all  tending  to  marked  improvements  in  the  construction 
of  tanneries.  Health  laws  and  efficiency  are  working  together 
to  eliminate  the  offensive  old  style  tannery.  Tanneries  may 
now  be  found  in  cities  so  built  and  conducted  as  to  compare 
favorably  with  other  industrial  plants. 

Construction. 

The  unsatisfactory  experience  of  many  underwriters  in 
insuring  tanneries  is  largely  due  to  poor  construction.  The 
typical  old  style  tannery  is  so  built  that  its  total  destruction 
is  practically  assured  whenever  a  fire  gets  a  fair  start. 

The  type  is  a  group  of  rambling  wooden  buildings  of  very 
light  construction  with  steep  roofs  covered  with  wooden  shingles, 
the  main  building  often  six  or  seven  stories  high,  often  with  the 
walls  of  the  upper  stories  equipped  with  louvers,  or  open  sides, 
and  around  this  central  building  a  miscellaneous  lot  of  exten- 
sions and  additions,  mostly  one  story  high,  the  whole  being 
usually  in  need  of  general  repairs,  saturated  with  grease  and 
without  sign  of  fire  walls  or  protection  for  vertical  openings. 


There  is  little  hope  for  such  a  tannery,  and  were  it  mothering 
hazards  of  twice  the  usual  severity,  they  would  be  unimportant 
relatively  to  the  overpowering  defective  construction. 

Many  tanneries  have  the  floors  of  the  upper  stories  slatted 
as  well  as  the  open  walls,  to  permit  air  to  circulate  through 
the  rooms  to  dry  the  leather  which  they  contain.  The  posts 
of  the  buildings  are  usually  very  light,  and  if  the  building  is 
fully  stocked  with  heavy  leather,  overloading  the  structure 
to  a  dangerous  degree  as  is  often  found,  we  may  form  some 
conception  of  the  catastrophe  which  follows  a  fire  in  such  a 
structure. 

Over  50%  of  all  serious  tannery  losses  have  been  due  to 
the  rapid  destruction ,  made  possible  by  the  type  of  building 
described. 

Protection. 

Second  in  importance  to  poor  construction  is  lack  of  pro- 
tection which  has  resulted  in  the  destruction  of  about  25% 
of  the  tanneries  where  serious  losses  have  occurred.  It  is  sur- 
prising to  find  in  the  fire  record  tanneries  having  a  value  of  over 
$100,000  which  were  destroyed  because  they  lacked  even  the 
simplest  means  of  fire  protection.  In  one  case  not  even  fire 
pails  were  available.  The  fires  forming  this  group  were  such 
as  could  easily  have  been  controlled  by  ordinary  means  of 
protection. 

The  remaining  25%  of  large  tannery  losses  is  chargeable 
to  lack  of  alarm  service.  These  valuable  tanneries  were  left 
without  care,  no  watchman  or  other  means  for  transmitting  a 
fire  alarm  to  summon  aid.  It  seems  inconceivable  that  prop- 
erties of  such  value  are  left  without  guarding,  nights  and  Sundays. 
The  fires  in  this  group  were  so  extensive  when  discovered  that 
the  destruction  of  the  plant  was  assured,  regardless  of  an}- 
virtues  it  might  possess  in  the  form  of  good  construction  or  of 
fire  protection. 

I  have  purposely  put  off  the  discussion  of  the  processes  and 
hazards  of  tanneries  in  order  that  the  great  importance  of 
construction  and  protection,  for  this  class  of  risk,  might  be 
emphasized  and  be  borne  in  mind  through  all  the  remarks 
which  may  follow.  The  class  has  been  unique  in  its  many 
instances  of  apparent  disregard  of  ordinary  precautions  in 
guarding  large  values  by  proper  housing  and  adequate  fire 
protection.  General  improvements  in  the  class  and  the  more 
acute  sense  of  appreciation  of  values  which  shows  signs  of 
appearing  in  our  people  without  doubt  are  tending  toward 
a  more  favorable  record  for  the  tanneries  of  the  future. 


Occupancy. 

Tanning  is  the  art  of  preserving  the  skins  of  animals  in 
the  useful  and  convenient  form  known  as  leather. 

A  pelt  fresh  from  an  animal  contains  hair,  which  except 
for  some  special  uses,  must  be  removed,  and  also  animal  matter 
which,  if  allowed  to  remain  will  either  putrefy  and  ruin  the  skin 
or  will  dry  hard,  making  the  skin  stiff  and  horny  and  so  unfitted 
for  use.  The  tanner  removes  the  hair,  destroys  the  animal 
tissues  surrounding  the  fibres  and  improves  the  fabric  by  filling 
the  fibre  spaces  with  oils  or  other  preservatives  and  finishes 
one  surface  of  the  skin,  according  to  the  particular  uses  to  which 
the  leather  is  to  be  put,  by  coloring  and  polishing. 

These  objects  necessitate  certain  departments  in  the  tannery, 
aside  from  such  terms  as  store  house,  finishing  room,  etc.,  which 
are  common  to  most  all  our  manufactories,  which  need  defining 
for  those  to  whom  their  names  are  unfamiliar. 

The  "beam  house"  is  the  part  of  the  plant  where  the  pre- 
liminary work  on  the  pelts  is  done,  the  dehairing  and  its  accom- 
panying processes.  This  is  usually  a  one-story  building  adjoining 
the  main  building. 

The  "tan  yard"  is  usually  a  one-story  shed,  the  entire  floor 
of  which  is  mostly  all  occupied  by  tan  vats,  square  wooden 
or  concrete  tubs  which  contain  the  tanning  liquor  and  the 
skins  undergoing  the  tanning  process.  Many  modern  tanneries 
do  not  have  tan  yards,  but  tan  the  skins  in  large  revolving 
tubs  or  wheels,  usually  located  in  the  first  story  of  the  main 
building. 

''Dry  lofts''  are  the  rooms  usually  comprising  the  upper 
stories  of  the  main  building  and  contain  the  leather,  hung  on 
hooks  or  tacked  on  boards,  to  dry. 

The  finishing  processes  are  usually  located  in  the  main 
building  in  the  stories  below  the  dry  lofts. 

Raw  Stock.  Tanneries  are  generally  placed  in  one  of  two 
classes,  hide,  or  heavy  leather  tanneries,  or  skin  or  light  leather 
tanneries. 

Hides  are  the  pelts  of  large  mature  animals,  such  as  horses, 
cattle,  camels,  and  walruses.  Heavy  leather,  such  as  is  used 
in  shoe  soles  and  belting,  is  produced  from  hides. 

Splits  are  split  hides.  Some  heavy  hides  have  been  split 
apart  into  five  separate  pieces,  each  the  full  size  of  the  hide. 
Leather  for  shoe  uppers,  bags,  carriage  tops,  furniture,  etc., 
is  produced  largely  from  splits. 

Kips  are  undersized  hides.  Hides,  kips  and  splits  are  found 
in  heavy  leather  tanneries. 

Skins  are  the  pelts  of  small  animals,  such  as  calves,  sheep, 
lambs,  goats,  kids,  etc.  They  are  made  into  leather  for  shoe 
uppers,  pocket  books,  book  bindings,  gloves,  fancy  articles, 
upholstering,  etc.  Pelts  are  shipped  in  three  forms,  green, 
salted  or  dryed. 


8 

Green  Hides  are  hides  fresh  from  the  carcass  and  are  un- 
treated. 

Salted  Hides  are  those  with  salt  rubbed  over  the  flesh  side. 
They  are  usually  folded  and  tied  up,  fur  side  out. 

Dryed  Skins  are  hard,  wrinkled  and  stiff,  having  been 
dried  without  treatment. 

Pickled  Skins  may  be  the  stock  of  a  part  process  tannery. 
They  are  skins  which  have  been  dehaired  and  soaked  in  an 
acid  bath.    They  are  very  sensitive  to  damage  by  water. 

A  Hide  Tannery  is  usually  considered  as  producing  sole 
leather,   belting,   etc. 

A  Chrome  Tannery  produces  light  leather  by  the  so-called 
chrome  process. 

A  n  Extract  Tannery  is  one  using  certain  extracts  as  a  tanning 
medium. 

A  Bark  Tannery  uses  oak  or  other  bark  as  a  tanning  agent. 

A  Morocco  Shop  is  a  tannery  making  kid  from  goat  skins. 

Processes. 

An  animal's  skin  has  a  thin  outer  portion  or  layer,  the  epi- 
dermis, containing  the  hair  sacks,  sweat  glands,  etc.  This  part 
of  the  skin  cannot  be  formed  into  leather  and  must  be  entirely 
removed  in  the  preparatory  processes. 

The  corium,  the  true  skin,  is  the  portion  used  for  leather. 
It  forms  the  bulk  of  the  pelt  and  is  separated  from  the  epi- 
dermis by  a  thin  membrane  which  forms  the  so-called  grain 
of  the  leather.  Splits  having  the  grain  are  much  more  valuable 
than  those  from  the  flesh  side  of  a  hide. 

The  corium  consists  of  bundles  of  fibres  interlaced  and 
surrounded  by  a  softer  substance  which  is  removed  in  tanning. 
The  tissues  fastening  the  skin  to  the  body  contain  fat  cells  and 
are  removed  in  the  process  called  "fleshing".  Care  is  taken 
in  removing  the  epidermis  to  not  injure  the  grain. 

Hides  are  thicker  on  the  neck  and  butts  than  on  the  sides 
and  bellies.  The  value  of  hides  and  skins  varies  with  the  breed, 
feed  and  health  of  the  animal,  the  climate  in  which  it  was  raised 
and  the  freedom  of  the  pelt  from  injuries  from  sores,  cuts  and 
bruises. 

Large  quantities  of  water  are  required  by  tanneries.  Soft 
water  is  essential  to  good  work.  It  is  sometimes  softened  arti- 
ficially. 

Soaking.  The  first  process  is  soaking.  Green  hides  are 
soaked  to  remove  blood  and  dirt,  salted  hides  to  remove  the 
salt  and  dried  hides  to  soften  them. 

Salt  and  foreign  matter  interfere  with  future  processes 
and  blood  and  other  animal  matter  may  cause  fermentation 
if  not  removed,  and  they  interfere  with  the  action  of  the  tanning 
agents. 


9 

Cold  water  is  used  for  soaking,  which  is  done  in  vats  where 
the  pelts  may  remain  several  days.  When  removed  from  the 
soaks  the  pelts  are  trimmed  with  a  knife,  tails,  ears,  animal 
matter  and  other  irregularities  being  then  removed. 

Dehairing  (Depilation) .  Unless  it  is  desired  to  tan  the  skin 
with  the  hair  on,  the  second  process  is  dehairing.  This  may 
be  done  in  two  ways : 

1.  By  Putrefaction,  called  sweating.  This  is  the  older 
process,  still  in  use  for  sole  and  some  other  heavy  leathers. 
The  skins  are  put  in  warm,  closed,  damp  rooms,  where  they 
decay  only  sufficiently  to  permit  the  ready  removal  of  the  hair. 
These  skins  are  usually  given  an  acid  bath  afterward,  as  the 
process  tends  to  weaken  them. 

2.  Liming.  Pelts  are  placed  in  vats  containing  milk  of 
lime  (slacked  lime  and  water)  and  worked  daily  for  three  to 
fifteen  days.  About  one  pound  of  lime  is  used  to  ten  pounds 
of  pelt.  Liming  loosens  the  hair  and  epidermis,  swells  the 
corium  and  dissolves  .the  tissues  surrounding  the  fibres. 

For  high  grade  leathers,  where  a  fine  grain  and  softness  are 
essential  a  small  amount  of  sulphide  of  arsenic  (AS2S2)  is  added 
to  the  lime  liquor. 

Where  injury  to  the  hair  is  not  important  sodium  sulphide 
will  hasten  liming.    This  is  used  much  on  goat  skins. 

Liming  is  sometimes  hastened  by  keeping  the  skins  in 
motion  by  paddle  wheels  working  in  the  vats. 

The  milk  of  lime  is  prepared  by  slacking  quick  lime.  This 
work  should  be  done  outside  or  in  a  detached  shed,  if  done 
extensively.  Some  tanners  make  up  a  batch  of  slacked  lime 
in  advance  sufficient  for  several  weeks'  supply. 

In  most  tanneries  the  dialy  supply  of  lime  is  brought  to 
the  factory  each  day.  Quick  lime  in  storage  constitutes  a  well 
known  hazard.  If  it  becomes  wet  it  will  heat  sufficiently  to 
set  fire  to  its  wooden  containers  and  any  nearby  combustibles. 
It  should  be  stored  in  a  detached  shed  and  the  shed  should  have 
watertight  roof  and  walls.  The  floor  should  also  be  above  grade 
to  insure  dryness. 

Beaming.  The  pelts  are  removed  from  the  lime  pits  and 
thrown  over  a  wooden  horse  for  drainage. 

If  beamed  by  hand  they  are  then  spread  on  the  beam 
(an  inclined  bench  with  a  curved  surface),  hair  side  up,  where 
the  hair  is  scraped  off  by  a  large  blunt  edged  knife  held  by 
handles  at  each  end. 

Unhairing  machines  are  now  much  in  use.  They  consist 
mainly  of  a  revolving  cylinder  whose  surface  is  a  series  of  knife 
edges  set  inclined  both  ways  from  the  centre  of  the  cylinder, 
so  as  to  tend  to  spread  and  stretch  out  the  skin  as  it  is  shaved. 
The  skin  is  held  against  the  knives  by  a  pressure  plate  or  cylinder. 


10 

Slating  is  additional  beaming  by  hand  on  a  slate,  marble 
or  other  smooth  surface  to  more  thoroughly  complete  the  pro- 
cess. It  is  not  found  in  all  tanneries,  but  usually  follows  machine 
beaming. 

Fleshing  is  the  process  of  removing  flesh,  fat,  etc.,  from  the 
flesh  side  of  the  pelt.  It  may  precede  or  follow  dehairing.  If 
done  by  hand  a  sharp  double-edged  knife  is  used.  The  fleshing 
machine  is  similar  in  its  action  to  the  dehairing  machine. 

Bating  —  Puering.  If  the  lime  action  is  allowed  to  con- 
tinue the  skin  would  be  spoiled  and  the  tanning  process  inter- 
rupted. 

To  counteract  the  lime  and  make  soft  the  skin,  which  has 
been  swollen  and  stiffened  by  the  lime,  the  skins  are  placed 
in  vats  containing  weak  solutions  of  pigeon  or  hen  manure. 

Puering  is  the  same  process,  except  dog  manure  is  sub- 
stituted. This  is  used  in  producing  fine  and  light  leathers, 
kid,  morocco,  glove  leather,  etc. 

The  skins  are  kept  in  the  baths  only  a  few  hours.  It  leaves 
them  alkaline,  as  they  contain  ammonia  and  lime. 

In  working  calf  and  some  other  skins,  "drenching"  follows 
or  is  used  as  a  substitute  for  bating.  This  entirely  removes 
the  lime  and  leaves  the  skin  plump  and  the  fibres  open,  ready 
for  tanning. 

The  drench  liquor  is  prepared  by  fermenting  bran  in  warm 
water,  which  forms  lactic  and  acetic  acids.  The  skins  are 
usually  left  in  the  baths  over  night  and  worked  during  the  night 
to  keep  them  submerged.  This  process  makes  soft  leather. 
It  is  not  used  for  belting,  soles,  harness  leather,  etc. 

Splitting.  Thick  hides  are  often  split  into  two  or  more 
layers,  thus  in  a  way  making  one  hide  double  or  triple  itself. 
The  layer  having  the  grain  or  hair  side  is  the  best  piece,  the  other 
layers,  called  "splits,"  making  an  inferior  leather. 

Hides  may  be  split  when  taken  from  the  liming  vats  or 
split  later  after  tanning. 

Splitting  machines  consist  mainly  of  a  rapidly  travelling 
steel  band  knife,  sharpened  continuously  by  an  emery  wheel. 
A  suitable  table,  gauge  plate  and  rollers  guide  the  hide  against 
the  knife.  The  machines  are  very  skilfully  made  and  they  can 
be  adjusted  to  take  off  a  split  as  thin  as  yg  of  an  inch. 

The  emery  wheel  operating  on  the  rapidly  moving  knife 
gives  off  -a  shower  of  sparks.  It  should  be  and  usually  is  enclosed 
in  a  metal  box  with  a  fan  to  take  the  dust  away. 

In  splitting  dry  hides  there  is  an  inflammable  leather  dust 
given  off  which  constitutes  a  hazard  as  the  dust  may  ignite 
from  the  sparks. 

Pickling.  The  skins  are  worked  usually  in  wheels  in  a 
solution  of  salt  and  sulphuric  acid  or  for  some  leathers  lactic, 
formic,  or  boric  acid,  ammonium  chloride,  etc. 


11 

Pickling  is  more  or  less  of  a  substitute  for  the  bacterial 
bates  and  produces  a  leather  less  soft  than  the  latter. 

Pickled  skins,  especially  pickled  sheep  skins,  are  often  the 
raw  product  of  some  tanneries  which  do  not  conduct  a  beam 
house.  They  are  quite  susceptible  to  damage  by  fresh  water, 
for  unless  they  can  be  promptly  handled  spots  will  develop 
in  the  leather  wherever  the  pickle  has  been  disturbed  by  fresh 
water.  The  location  of  the  pickled  skin  storage  is  quite  impor- 
tant to  the  underwriter.  It  preferably  should  be  outside  or 
in  some  building  where  the  occupancy  in  floors  above  is  not  likely 
to  give  cause  for  the  operation  of  sprinklers  or  fire  streams. 

Degr easing.  In  sheep  and  pigskin  tanneries  degreasing 
is  often  found.  These  skins  contain  much  oil,  and  usually  after 
pickling  they  are  degreased.  This  is  done  by  hydraulic  or  steam 
presses.  A  large  number  of  skins  are  packed  into  the  press, 
sometimes  in  press  cloths  or  between  boards,  and  a  high  pressure 
applied.    The  grease  is  collected  in  pans  at  the  bottom. 

Press  rooms  are  necessarily  very  oily,  and,  where  used,  the 
care  of  the  press  cloths  is  most  important.  When  washed  they 
should  be  dried  in  metal  dryers  or  in  a  well-protected  room 
having  all  steam  pipes  guarded  by  screens. 

Naptha  degreasing  is  a  separate  industry  not  usually  found 
in  tanneries.  It  is  a  very  hazardous  process  and  should  not 
be  permitted  in  or  near  other  buildings. 

With  the  completion  of  the  processes  to  this  point  the  hides 
or  skins  are  ready  for  tanning.  There  will  be  found  individual 
cases  where  the  work  is  carried  on  differently  than  described 
and  a  quite  radical  departure  from  them  may  be  occasionally 
discovered,  but  in  general  the  preliminary  or  beam  house  pro- 
cesses of  the  average  tannery  will  be  found  about  as  pointed  out. 

Practically  all  these  processes  are  wet  and  in  general  fires 
are  unlikely  to  occur  where  they  are  conducted.  There  have 
been,  however,  many  fires  starting  in  these  wet  rooms,  some 
from  quicklime,  workmen's  overalls  on  steam  pipes,  smoking, 
electrical  apparatus,  repair  work,  hot  bearings,  rubbish,  etc. 

Occasionally  a  hair  dryer  will  be  found  in  a  tannery,  but 
as  a  rule  the  hair  and  other  by-products  are  promptly  removed, 
being  worked  into  marketable  products  by  other  concerns. 
Hair  is  dryed  just  as  textiles  are  dryed  in  our  woolen  mills, 
either  by  mechanical  dryers  or  on  screens  called  "table"  dryers. 
In  either  case  steam  pipes  are  used.  The  old  dryers  are  built 
of  wood,  but  the  newer  ones  are  of  metal.  All  bearings  for  the 
fan  and^  movable  apron  should  be  of  the  self-oiling  type  and 
be  outside  the  walls  of  the  dryer.  All  dryers  should  be  equipped 
with  sprinklers. 

The  moisture,  acid  and  ammonia  fumes  of  the  beam  house 
processes  cause  much  corrosion.  Especial  care  is  required 
to  guard  the  electrical  equipment.  Wiring  should  be  preferabh 
of  open  knob  construction  with  rubber  insulation. 


12 

All  refuse  from  the  beam  house  processes  should  be  promptly 
removed  to  a  safe  place.  Hair,  pieces  of  pelt,  fleshings,  animal 
bates,  etc.,  may  heat  up  to  a  dangerous  temperature  if  allowed 
to  accumulate,  especially  if  mixed  with  other  organic  refuse. 
Limed  hair  and  fleshings  are  especially  subject  to  heating  and 
should  be  removed  daily. 

Tanning.  In  a  manner  somewhat  similar  to  the  action 
of  dyes  on  the  textile  fibres,  but  of  a  nature  not  yet  fully  under- 
stood, certain  reagents  act  on  the  fibres  of  the  corium  to  change 
their  character  and  preserve  them  in  the  form  known  as  leather. 
These  active  agents  are  tannic  acid,  several  metallic  oxides 
(such  as  cromium,  alumina  and  iron,  (oxidized  fats  or  oils, 
insoluble  metallic  soaps  (stearic  acid,  etc.,  with  lead  oxide) 
picric  acid,  pinic  acid,  etc.,  with  new  ones  added  from  time  to 
time  with  the  advancement  of  the  art. 

Tanning  was  formerly  conducted  solely  by  the  use  of 
vegetable  products  containing  tannic  acid  and  these  were  few, 
but  now  a  great  variety  of  both  vegetable  and  mineral  tanning 
agents  are  employed  permitting  the  tanners  to  vary  their  pro- 
duct considerably.  A  great  variety  of  leathers  is  now  produced, 
good,  bad  and  indifferent,  adaptable  to  many  purposes.  Some 
leathers,  beautiful  in  their  coloring  and  softness,  are  produced 
by  the  new  chemicals.  The  art  has  made  great  progress  and 
changes  are  continually  under  way  which  call  for  careful  watch- 
fulness on  the  part  of  the  underwriter.  Changes  in  chemicals 
and  methods  may  mean  the  introduction  of  new  hazards  at 
any  time.  I  shall  mention  later  some  which  quite  lately  have 
been  introduced. 

The  Vegetable  Tannins  are  infusions  or  extracts  from  the 
bark  of  the  oak,  hemlock,  willow,  chestnut  and  other  barks, 
quebracho,  gambier,  sumac  and  others  of  lesser  importance. 

Ground  oak  bark  was  used  in  the  old  style  tannery  very 
extensively,  and  it  still  produces  the  best  sole  and  belt  leather. 
It  gives  a  light  colored  leather.    Oak  tans  very  slowly. 

Hemlock,  strictly  a  variety  of  fir,  gives  a  red  colored  leather 
which  is  commonly  seen  in  sole  leather  and  belting.  Willow 
is  not  much  used.    It  gives  a  yellow  color. 

Quebracho  is  very  extensively  used  on  both  hides  and  sheep 
skins.     Quebracho  comes  in  sacks  in  the  form  of  a  hard  gum. 

Sumac  is  a  yellow  powder  used  extensively  on  sheep  skins 
and  often  on  goat  skins  (kid). 

Some  of  the  vegetable  tanning  materials  in  lesser  use  are 
elm,  beech,  horse  chestnut,  acacia,  divi-divi,  nut-galls,  yalonia, 
myra-bolams  and  palmetto. 

The  tanning  liquors  are  made  by  adding  the  vegetable 
extracts  to  water  to  the  required  strength.  Bark  liquors  are 
obtained  by  leeching,  which  will  be  later  mentioned. 

The  mineral  tanning  agents  are  salts  of  aluminum,  chromium, 
sodium,  zinc,  manganese,  etc. 


13- 

The  most  important  of  these  is  the  salt  of  chromium  (po- 
tassium di-chromate) ,  from  which  we  get  the  term  Chrome 
Tanning. 

This  process  is  used  for  spHts,  kips,  calfskins,  sheepskins, 
skivers,  kid,  and  such  skins  for  light  leather.  Chrome  tanned 
leather  is  a  greenish  blue  color  before  dyeing.  Some  belting 
is  chrome  tanned  and  it  is  sold  for  use  in  wet  places.  Of  late 
we  have  seen  chrome  tanned  shoe  soles  in  use  quite  a  little. 

Alum  tanning  (sulphate  of  aluminum  and  common  salt) 
is  the  next  in  importance  to  chrome  tanning.  It  is  used  to  pro- 
duce white  and  other  light  colored  leathers  from  both  hides 
and  sheep  skins  and  for  kid. 

Oil  Tanning  is  the  oldest  form  of  tanning  on  record.  It 
is  more  of  a  preserving  means  than  a  strict  tanning,  and  with 
alum  tanning  and  some  other  salts,  should  more  accurately 
be  called  "tawing"  than  tanning.  The  former  term  is  little 
used,  however,  all  processes  of  producing  leather  being  generally 
called  tanning. 

Oil  tanned  leather  is  represented  by  chamois,  buff,  some 
"ooze"  leather,  "buckskin,"  etc.  Chamois,  so-called,  is  the 
flesh  side  of  a  split  sheep  skin  or  skiver. 

Cod  oil  is  practically  the  only  oil  now  used,  although  oil 
tanning  can  be  done  by  some  animal  oils..  The  skins,  after 
a  very  thorough  bating,  are  milled  in  the  cod  oil  which  surrounds 
and  preserves  the  fibres.  Mills  similar  to  fulling  mills  used  in 
woolen  finishing  are  used  for  this  purpose.  An  oxidation  takes 
place  also  in  the  goods,  a  temperature  of  over  150°  being  reached, 
after  which  the  cod  oil  and  natural  oil  of  the  skin  is  expressed. 
This  bi-product  is  known  as  Degras  and  is  used  for  currying 
and  dressing  heavy  leathers. 

The  presence  of  the  fish  oil  and  the  oxidization  process 
constitute  a  fire  hazard  necessitating  strict  cleanliness  to  insure 
safety  against  fires  from  spontaneous  ignition  where  oil  tanning 
is  conducted. 

The  real  tannins  have  a  permanent  effect  on  the  leather. 
They  have  the  properties  of  becoming  precipitated  upon  and 
into  the  fibres  in  the  tanning  process.  The  tawed  leathers 
are  not  so  permanent,  and  washing  destroys  the  result  of  the 
process  more  or  less. 

Bark  Extract  Preparing.  Most  of  the  tanneries  receive 
the  bark  extracts  ready  for  use.  What  we  know  as  the  "bark" 
tannery  makes  its  own  liquor  from  the  raw  bark,  which  is  often 
stored  in  large  piles  in  the  yard,  but  usually  kept  covered. 

There  is  a  marked  increase  of  hazard  in  the  bark  tannery 
over  the  extract  and  chrome  tannery  owing  to  the  processes 
necessary  to  grind  the  bark,  conveying  the  ground  bark  to  the 
leach  tanks  and  caring  for  the  spent  bark  and  refuse,  which 
is  usually  burned  at  the  boilers. 


•14 

The  bark  mill  consists  of  a  rapidly  revolving  steel  disk 
fitted  with  knives  which  cut  the  bark  into  small  bits.  The 
creation  of  dust  is  a  loss  to  the  mill,  but  cannot  be  wholly- 
avoided,  so  the  hazard  of  dust  explosions  is  present  as  well 
as  those  incident  to  the  rapidly  revolving  grinder  subject  to 
contact  with  foreign  matter  entering  with  the  bark  and  to  the 
breakage  of  its  own  knives  and  parts.  The  more  modern  mills 
are  made  entirely  of  steel,  as  are  also  the  hoppers,  conveyors, 
etc.,  but  the  older  tanneries  have  wooden  mills  with  wooden 
appurtenances. 

The  bark  mill  is  such  a  source  of  danger  to  the  main  buildings 
that  it  always  should  be  in  a  detached  building  or  cut  off  in 
a  standard  manner.  All  hoppers  and  conveyors  should  be  of 
steel  and  the  refuse  kept  removed  as  much  as  possible  from  the 
bark  mill  room. 

Hot  bearings  have  started  some  fires.  The  mill  should  have 
grease  cups,  or  self -oiling  bearings,  preferably  both. 

Some  bark  mills  have  a  horizontal  disk,  their  driving 
shaft  being  vertical.  The  step  at  the  bottom  of  this  shaft 
is  a  source  of  danger  and  its  oiHng  should  be  thoroughly  safe- 
guarded. Such  mills  should  be  elevated  on  a  platform  so  the 
step  will  not  be  below  the  floor,  where  it  may  become  surrounded 
by  chips  and  dust.  • 

On  account  of  the  dusty  conditions  surrounding  the  bark 
mill  no  open  lamps  should  be  allowed  and  all  lamps  should  be 
well  guarded.  Bark  grinding  can  be  conducted  in  the  daytime 
and  in  a  well  arranged  mill  room  there  would  be  no  great  necessity 
for  any  artificial  light. 

A  fan  and  cyclone  separator  should  be  used  to  collect  the 
dust.    Some  of  the  older  mills  have  steam  jets  to  lay  the  dust. 

Leaching.  The  leach  house  is  usually  a  large,  roughly 
constructed  building  to  contain  the  large  wooden  vats  or 
leach  tubs.  There  is  no  hazard  to  the  process  except  steam 
pipes  which  are  used  to  heat  the  liquor  sHghtly. 

Leaching  consists  of  soaking  the  bark  chips  in  water. 
The  tannic  acid  of  the  bark  is  soluble  in  water. 

There  is  danger  of  conveying  fire  from  the  bark  mill  to 
the  leaching  building  by  means  of  the  bark  conveyor.  The 
safest  method  of  conveying  the  bark  is  to  float  it  on  water 
into  the  tubs.  Screw,  belt,  chain  and  pneumatic  conveyor^ 
also  are  used. 

Conveyors,  if  of  wood,  should  have  open  tops.  Spent 
bark  conveyors  to  the  boiler  house  are  equally  dangerous  with 
the  bark  mill  conveyor. 

Spent  bark  is  sometimes  pressed  in  a  mill  having  steel  rollers 
to  recover  all  the  extract  and  make  the  spent  bark  dryer  so 
it  may  be  utilized  at  once  for  fuel. 


15 

If  not  expressed  the  spent  bark  is  usually  conveyed  wet 
to  the  boiler  house,  where  it  is  allowed  to  stand  in  a  large  pile 
to  dry  out.    As  it  becomes  dry  it  is  fed  to  the  boilers. 

Boiler  Houses. 

Many  fires  result  from  the  boiler  fires  and  stack;  about 
20%  of  all.  Such  fires  are  especially  prolific  in  bark  tanneries. 
The  fire  spreads  back  from  the  boiler  furnace  to  the  large  pile 
of  spent  bark  usually  kept  in  the  boiler  room,  runs  over  the  pile, 
often  extending  to  the  roof  and  into  the  conveyor,  which  serves 
to  transmit  the  fire  to  the  main  buildings.  Or,  in  burning  the 
spent  bark,  the  sparks  from  the  stack,  which  are  almost  unavoid- 
able, fall  on  the  shingle  roofs. 

Spark  arresters  help,  but  are  hard  to  maintain.  The  shingle 
roof  should  be  replaced  with  a  spark  resisting  covering.  Boiler 
flues  and  chimneys  should  be  kept  clean.  A  very  bad  fire  record 
has  resulted  from  both  these  causes. 

The  Dutch  oven  type  of  boiler  furnace  is  probably  the  safest 
for  this  work.  The  boiler  house  in  bark  tanneries  should  prefer- 
ably be  of  fireproof  construction,  or  at  least  well  detached. 

For  an  extract  tannery  burning  coal  an  ordinary  cut  off 
power  plant  is  safe.  The  power  required  to  operate  the  tannery 
is  comparatively  light,  but  is  increasing  rapidly  as  machines 
replace  the  old  hand  processes. 

Tanning. 

Three  methods  are  employed  in  tanning: 

1.     Suspension  in  vats. 
.    2.     Stirring  with  paddle  wheels. 

3.     Tumbling  in  mills  or  "pin"  wheels. 

1.  The  first,  suspension  in  vats,  is  the  process  mostly 
used  in  bark  tanneries  and  extract  tanneries  where  the  heavy 
leathers  are  produced.  It  necessitates  the  tan  yard,  usually  a 
one-story  shed-like  structure  of  large  area,  the  floor  of  which 
is  mostly  occupied  by  vats,  usually  built  of  planks.  They 
are  five  or  six  feet  deep,  and  vary  in  size  with  the  hides  being 
treated.  The  hides  are  usually  hung  over  sticks,  which  suspend 
them  side  by  side,  the  vat  being  filled  with  the  tanning  liquor 
over  the  tops  of  the  sticks.  This  is  a  slow  process,  varying 
with  the  tanning  agents  used,  the  thickness  and  kind  of  hide. 
The  vats  when  filled  are  floored  over  with  loose  planks  to  facili- 
tate the  working  at  adjoining  vats.  The  location  of  tan  vats 
in  the  main  building  is  an  occupancy  defect.  Separate  tan  yards 
are  better. 

The  spoiling  of  tan  liquors  in  tan  vats  by  diluting  with 
hose  stream  or  sprinkler  water  or  by  soiling  from  the  debris 
of  a  fire  has  often  resulted  in  a  large  loss.  This  is  espeially 
important  in  use  and  occupancy  insurance. 


16 

The  continuity  of  the  entire  processes  in  the  tannery  can 
be  interrupted  seriously  by  the  spoiHng  of  the  tan  Hquors. 
If  tan  vats  are  located  below  hazardous  rooms  the  water  used 
on  minor  fires  in  these  places  is  apt  to  get  into  the  vats  with 
unnecessary  loss. 

The  hide  from  the  beam  house  is  first  treated  with  weakened 
(partly  spent)  liquor,  but  as  the  tanning  continues  the  stock 
is  moved  to  vats  containing  stronger  tanning  liquor.  In  some 
cases  the  liquor  is  changed  by  pumping,  the  hides  remaining 
in  the  original  vat.  For  heavy  leather  the  final  tanning  is 
often  accomplished  by  packing  the  hides  horizontally  with  a 
layer  of  ground  bark  between  each,  the  whole  being  covered 
with  strong  tan  liquor. 

When  thoroughly  tanned  the  hides  are  removed  from  the 
vats  and  "scoured"  usually  by  a  machine,  which  scrubs  them 
while  water  is  applied. 

2.  The  second  method,  the  use  of  paddle  wheels,  is  used 
mostly  for  goat  skins  in  so-called  morocco  shops,  but  other 
light  skins,  sheep  or  calf,  are  sometimes  so  treated.  The  tanning 
liquor  and  skins  are  placed  in  vats  or  tubs,  over  which  paddle 
wheels  are  mounted  and  rotated  to  continually  stir  the  skins 
and  liquor. 

3.  The  third  method,  placing  the  skins  and  tanning 
liquor  together  in  rotating  mills,  is  most  extensively  used 
and  for  all  work,  except  in  producing  the  very  heavy  leathers. 

Chrome  tanning  is  conducted  usually  by  mills,  but  paddles 
are  generally  used  for  chrome  tanned  kid.  The  dichromate 
of  either  potassium  or  sodium  is  the  important  chemical  used. 
The  skins  are  milled  in  the  tanning  solution. 

There  are  slightly  varying  methods  of  conducting  the 
chrome  process.  Some  tanners  use  two  baths,  and  if  so  the 
skins  appear  yellow  after  the  first  treatment.  They  are  drained 
of  the  surplus  liquor  or  worked  on  a  "putting  out"  machine 
before  being  returned  to  the  second  bath,  from  which  they 
emerge  with  the  characteristic  blue-green  color  of  all  chrome 
tanned  leather. 

In  the  two-bath  process  hydrochloric  acid  is  used;  in  the 
one-bath  process  the  acid  is  sulphuric.  Both  acids  may  be  found 
in  chrome  tanneries  and  their  storage  constitutes  a  hazard. 

After  tanning  the  skins  are  allowed  to  rest,  to  set  the  tan. 
this  being  sometimes  done  by  working  the  skin  on  "setting" 
machines.  Bicarbonate  of  soda  is  used  to  neutralize  the  acid-, 
after  which  the  skins  are  washed  and  hung  up  or  tacked  on  boards 
to  dry. 

Drying. 

Skins  are  dryed  by  being  hung  on  hooks  flat,  as  are  clothes 
on  a  line,  or  they  may  be  tacked  on  boards.  The  latter  method 
is  called  boarding.     It  stretches  the  leather  as  it  dries  and  is 


17 

more  often  connected  with  the  later  finishing  process.  The 
upper  stories  of  the  main  buildings  of  a  tannery  are  usually 
used  as  dry  lofts. 

Skins  may  be  dried  by  the  atmosphere,  in  which  case 
the  sides  of  the  dry  rooms  are  equipped  with  louvers  to  regulate 
the  circulation  of  air  through  the  skins.  It  is  extremely  difficult 
to  stop  a  fire  in  these  rooms  so  open  to  the  wind.  It  is  only 
by  chance  that  sprinklers  in  such  rooms  can  show  their  usual 
efficiency. 

Steam  heated  dry  lofts  are  those  heated  by  steam  pipes. 
The  pipes  are  usually  placed  in  banks  at  the  ends  of  the  rooms 
and  possibly  also  at  the  center. 

Usually  the  hot  air  is  circulated  by  fans,  which  are  placed 
in  the  opposite  wall  from  the  steam  coils  and  discharge  the  mois- 
ture-laden air  outside  the  building.  In  sorhe  cases,  to  the 
further  consternation  of  the  fire  underwriter,  there  are  large 
floor  openings  under  the  steam  coils  and  at  other  places,  through 
which  the  air  is  circulated  by  fans  or  gravity,  among  the  several 
floors.  This  is  an  extremely  poor  arrangement.  Some  openings 
may  be  protected  by  trap  doors  arranged  with  fusible  links 
and  the  fans  may  be  arranged  to  be  stopped  automatically 
in  case  of  fire,  but  such  means  are  more  or  less  futile. 

The  safest  dry  lofts  are  those  where  the  floors  are  tight 
and  shut  off  properly  from  the  others,  and  each  room  equipped 
with  separate  steam  coils  and  with  a  separate  fan  at  the  opposite 
end. 

Drying  by  a  hot  air  system  from  a  central  plant  is  but 
seldom  found.  If  used,  all  flues  should  be  of  metal  and,  if  possible, 
the  use  of  fans  avoided. 

Alum  and  sumac-tanned  skins  are  usually  air  dried.  Heat 
is  generally  used  for  crome  and  extract  tanned  skins. 

Finishing. 

There  is  much  variety  in  the  processes  of  finishing  leather 
dependent  on  the  particular  uses  for  vv^hich  it  is  made.  Tanning 
in  general  is  simply  a  fibre-preserving  means,  and  skins  left 
without  further  treatment  would  be  coarse,  stiff  and  ill-adapted 
to  most  uses  required  of  leather.  Finishing  softens,  stretches 
and  sets  the  leather,  makes  its  thickness  uniform  and  gives 
it  the  particular  color  and  style  of  surface  finish  desired. 

When  light  colored  leathers  are  desired  and  uniformity 
in  shade  is  important  skins  are  retanned.  This  process  consists 
of  bleaching  or  removing  or  "stripping"  the  surface  tannage 
from  the  skins  by  weak  alkalis,  after  which  they  are  retanned 
with  a  light  colored  tanning  agent  such  as  sumac. 

Stuffing,  oiling,  fat  liquoring  are  the  processes  used  in 
surrounding  the  tanned  fibres  with  oils  to  lubricate  them  and 
make  the  leather  soft  and  pliable  and  also  to  add  body  and 


18 

weight;  Heavy  leather  is  stuffed  with  tallow,  degras,  fish  oil 
or  other  heavy  oils  and  in  the  old  style  tanneries  is  largely 
done  by  hand. 

The  light  leathers  are  fat  liquored  by  neatsfoot,  castor 
or  paraffine  oil  or  by  some  of  the  sulphonated  oils  now  used 
extensively.  After  stuffing,  heavy  leather  is  often  hung  up  to 
season  and  the  floors  of  the  rooms  become  exceedingly  oil  soaked. 
The  old  style  curry  shop  is  quite  generally  oil  soaked  throughout. 
Drip  pans  or  beds  of  sand  should  be  placed  under  all  oiled  leather 
likely  to  drip. 

Stuffiing  is  done  by  rubbing  in  the  grease  by  hand  with 
the  hide  spread  out  on  a  slab,  or,  as  is  now  more  common,  by 
milling  in  a  wheel.  The  fat  liquors  are  added  from  time  to 
time,  while  the  wheel  is  in  motion  and  steam  or  hot  air  is  also 
passed  into  the  drum  to  aid  the  oil  to  permeate  the  skin.  The 
temperature  seldom  exceeds  150°. 

Setting,  putting  out,  stretching,  slicking,  stoning  are  all 
finishing  processes  to  remove  excess  grease  and  water  and  to 
bring  the  leather  to  a  fixed  and  permanent  form. 

Stretching  is  usually  done  by  drying  the  skins 
while  tacked  on  boards  in  addition  to  the  use  of  machines  for 
that  purpose. 

Slicking  and  stoning  are  surface  finishing  processes,  the 
stoning  being  to  smooth  the  rough  fibres  of  the  flesh  side. 

Skiving  is  reducing  the  leather  to  uniform  thickness  by 
cutting  thin  "skivings"  from  the  flesh  side.  It  is  a  process 
somewhat  Hke  splitting.  Sparks  from  the  emery  wheel  which 
sharpens  the  cutter  may  get  into  the  skiving  or  leather  dust 
and  later  cause  a  fire. 

Shaving  is  similar  to  skiving,  but  produces  finer  waste, 
the  cutter  being  a  rapidly  revolving  wheel  with  many  cutters. 
The  machine  carries  an  emery  wheel  for  keeping  the  cutter 
sharp. 

Whitening  is  similar  to  shaving,  but  is  worked  on  both 
sides  of  the  leather.  Whitenings,  being  fine  waste  fibre  matter, 
if  taken  from  oily  leather,  are  considered  liable  to  spontaneous 
ignition  if  allowed  to  accumulate.  The  machine  also  has  an 
emery  wheel  sharpener. 

All  three  of  the  above  machines  might  cause  a  fire  from  the 
sparks  produced  by  the  cutter-sharpening  emery  wheel.  This 
should  be  confined  in  a  metal  shield. 

Buffing  is  smoothing  the  leather  on  large  sand  or  emery- 
covered  wheels.  Its  hazard  is  measured  by  the  character  of 
the  work  and  the  arrangement  of  the  machinery.  Buffings 
from  the  grain  side  of  leather  are  not  hazardous,  as  little  or  no 
oily  fibres  are  produced.  Buffings  from  the  flesh  side  of  very 
oily  leathers  might  be  subject  to  spontaneous  ignition.  Chrome- 
tanned  buffings  will  burn  readily  without  flame,  probably  due 
to  the  presence  of  sulphur,  and  they  will  nourish  a  spark  until 


19 

the  whole  mass  is  consumed.  Buffings  from  extract-tanned 
leathers  are  riot  readily  inflammable.  Gambler  buffings  burn 
readily  with  flame. 

Buffing  rooms  are  necessarily  dusty.  They  should  be  well 
shut  off  from  other  rooms  and  preferably  should  be  located 
outside  the  main  building.  Locations  over  leather  storage, 
tan  vats,  pickled  skins  or  other  large  values  constitute  defective 
occupancy. 

Buffings  may  become  ignited  by  hot  bearings,  friction 
or  the  misuse  of  the  wheels,  such  as  for  sharpening  knives, 
and  resurfacing  them  with  a  piece  of  steel  instead  of  by  a  stone 
or  brick.  Buff  wheels  and  fans  should  have  self-oiling  bearings 
and  grease  cups. 

Buffing  dust  should  be  cared  for  by  an  approved  blower 
system  discharging  to  a  safe  place  outside. 

Small  hose,  chemicals  or  pails  should  be  kept  in  service  in 
buffing  rooms. 

Pressing  is  sometimes  conducted  to  remove  surplus  oil. 

Coloring  and  dyeing.  Some  leather,  more  often  the  heavy 
leather  is  colored  by  a  mixture  prepared  from  lamp  black. 
This  material  is  subject  to  spontaneous  ignition  and  should 
be  stored  in  a  dry  place  preferably  outside  the  "main  plant. 

The  other  coloring  agents  are  not  hazardous,  being  usually 
prepared  logwood  or  aniline  colors. 

Staking  consists  of  drawing  the  leather  over  the  dull  edge 
of  a  piece  of  steel  to  make  it  soft  and  pliable.  It  may  be  done 
by  hand  or  by  machine. 

Seasoning.  Dried  blood,  gelatin,  albumen,  neats-foot  oil, 
or  olive  oil  is  daubed  over  the  leather,  after  which  it  is  buried 
in  damp  sawdust  for  a  time.  This  gives  a  special  finish  left 
dull  for  a  "mat"  finish  and  iron  for  a  glazed  finish.  Old  and 
oily  sawdust  constitutes  a  hazard. 

Ironing  is  glazing  by  hot  fiat  irons,  usually  gas  or  electri- 
cally heated.  The  means  for  heating  should  be  arranged  in 
a  standard  manner. 

Glazing  and  polishing  is  done  by  machines  and  in  morocco 
shops  is  extensively  conducted. 

Special  Finishes. 

There  are  many  special  finishes  for  fancy  leathers  and  all 
sorts  of  compounds  may  be  found  in  the  finishing  rooms. 

Wax  may  be  used,  and  the  wax-melting  hazard  may  be 
present. 

Some  leather  is  shellacked,  introducing  the  alcohol  hazard. 

Lacquers  containing  gun  cotton,  celluloid,  nitro  cellulose, 
or  whatever  it  may  be  called,  are  common  and  their  use  con- 
stitutes a  marked  hazard.  The  compound,  celluloid  dissolved 
in  amyl  acetate,  is  highly  inflammable,  as  are  also  skins  heavily 
coated  with  the  mixture.    Some  tanners  mix  their  own  compound. 


20 

It  is  applied  with  a  brush,  usually  from  open  dishes.  This 
hazard  cannot  be  too  safely  guarded.  All  supplies  of  the  material 
should  be  stored  and  mixed  outside. 

There  are  various  other  compounds  used  in  a  similar  manner, 
some  inflammable  and  others  not  hazardous. 

Embossing  is  pressing  engraved  dies  upon  the  finish  coatings 
of  the  leather  to  imitate  the  "grain"  of  certain  skins  or  to  other- 
wise ornament  the  surface. 

The  press  is  a  heavy  machine.  Usually  the  dies  are  gently 
heated  by  steam.  Gas,  gasolene  or  electrically  heated  dies, 
if  used,  should  be  carefully  arranged. 

Chemicals. 

Following  is  a  partial  list  of  chemicals  which  may  be  found 
in  a  tannery: 

Acetic,  muriatic,  oxalic,  sulphuric,  lactic  and  formic  acids, 
ammonia,  borax,  blue  vitriol  (crystals),  copperas,  sugar,  salt, 
gluecose,  flour,  egg  yolk. 

The  vegetable  extracts:  Sumac,  hemlock,  oak,  chestnut, 
quebracho,  etc. 

The  mineral  tannins:  Bichromate  of  soda,  dichromate 
of  potash,  thiosulphate  of  soda,  alum,  in  its  dififerent  forms,  and 
possibly  formaldehyde.  Also  fat  liquors  and  stuffing  materials 
used  in  finishing,  such  as  paraffine  oil,  sulphonated  oil,  castor 
oil,  olive  oil,  neats-foot  oil,  degras,  stearine,  tallow,  etc. 

Other  chemicals  are  glycerine,  iron  compounds,  potash, 
soda  ash,  bicarbonate,  sulphide  and  bisulphide  of  soda,  hypophos- 
phite  of  soda,  aniline  dies,  lamp  black,  and  various  coloring 
and  lacquering  compounds. 

Tannery  Defects. 

Construction.  High  buildings  of  light  construction,  large 
areas,  steep  shingled  roofs  and  floor  openings  unprotected. 
Boiler  house  not  cut  off. 

Occupancy.  Boilers  inside  main  plant.  Tan  vats  in  main 
buildings.  Buffing  in  main  buildings  or  over  tan  yard.  Pickled 
skins  in  basements,  or  first  stories,  under  hazardous  occupancies'. 
Lime  stored  inside.    Bark  mill  not  cut  off  or  detached. 

Protection.  No  adequate  fire  streams  available.  Lack  of 
sprinklers,  chemicals,  stand  pipes,  pails,  etc.  No  watchman 
or  fire  alarm.     No  trained  fire  brigade. 

Exposure.  Severe  exposure.  Unguarded  exposures.  Bark 
storage  near  main  buildings. 


21 

References  for  Collateral  Reading. 

Note:  These  references  are  suggested  as  helpful  supplementary 
reading  for  those  fitting  themselves  for  the  examinations  of  the  Insurance 
Institute  of  America. 

Jones,  Milton  F.  Tannery  Hazards.  In  Quarterly  Bulletin  of 
wSpecial  Hazards,  No.  12:59.  National  Fire  Protection  Association, 
Boston,  Mass. 

National  Fire  Protection  Association.  Tanneries.  Pam.  10pp. 
Boston-,  1912. 

Nourse,  Everett.  Tanneries  and  Leather  Manufacturing.  In 
Live  Articles  on  Special  Hazards,  v.  3:15.  Weekly  Underwriter  Pub. 
Co.,  New  York. 

Palm,  Robert.  Manufacture  of  Patent  and  Enameled  Leather. 
In  Quarterly  Bulletin  of  Special  Hazards,  No.  4:2.  National  Fire  Pro- 
tection Association,  Boston,  Mass. 

Tenney,  Winthrop  P.  Tanneries.  In  Quarterly  Bulletin  of  Special 
Hazards,  No.  6:12.     National  Fire  Protection  Association,  Boston,  Mass. 


Cnemical  Jrlazards 

BY 

MILTON  F.  JONES 

Chemistry  is  variously  defined,  but  in  general  terms  it 
isTthat  branch  of  science  which  treats  of  those  phenomena  in 
which  an  alteration  of  substance  occurs. 

Matter  is  indestructible.  The  usefulness  of  an  object 
or  substance  may  be  lost,  as  when  wood  burns,  but  its  component 
parts  have  passed  into  other  forms,  such  as  gas,  vapor,  smoke 
and  ash,  and  the  collective  weight  equals  or  exceeds  that  of  the 
original  substance. 

When  certain  substances  are  brought  into  contact  with 
each  other,  as  iron  and  moisture,  a  chemical  action  occurs 
and  the  iron  rusts.  The  attraction  which  exists  between  various 
substances,  and  which  causes  chemical  change  or  reaction  is 
known  as  chemical  affinity. 

Chemical  affinity  causes  wood  or  other  combustible  matter 
when  heated  sufficiently  to  unite  with  the  oxygen  of  the  air 
and  burn. 

Chemical  Elements. 

Substances  which  have  resisted  all  attempts  to  convert 
them  into'  simpler  substances,  and  which  cannot  be  formed  by 
the  union  of  others  are  known  as  chemical  elements.  Thus 
iron,  carbon,  oxygen  and  hydrogen  are  elements. 

About  85  elements  are  now  known.  Some,  such  as  those 
given  above,  exist  in  abundance:  oxygen  in  the  atmosphere, 
in  water,  animal  and  vegetable  matter,  rocks,  sand,  etc. ;  carbon 
in  animal  and  vegetable  matter,  oils,  and  various  substances 
widely  diffused.  Many  of  the  elements  are  rare  and  are  found 
in  small  quantities  only. 

Elements  are  assumed  to  consist  of  atoms,  these  being 
the  smallest  particles  or  units  constituting  the  elemental  mass, 
and  being  identical  as  to  size  or  weight  for  the  same  element. 
The  size  or  weight  of  the  atoms  of  each  element,  however,  differs. 

*  Notes  on  chemical  hazards  based  on  lectures  delivered  to  students  in  the  evening 
classes  of  the  Insurance  Library  Association  of  Boston,  191.5-1916,  following  the  courses 
of  the  Insurance  Institute  of  America. 


23 

Molecules. 

Atoms  are  combined  into  molecules  consisting  of  two  or 
more  atoms,  a  molecule  being  the  smallest  separate  particle 
which  can  exist  in  a  free  state.  When  atoms  are  set  free  by  the 
decomposition  of  a  compound,  and  before  they  combine  with 
other  similar  atoms  or  with  atoms  of  other  elements,  they  possess 
or  exhibit  greater  energy  than  when  combined  in  a  molecule. 
This  condition  is  known  as  the  nascent  state.  For  example 
the  molecule  of  oxygen  contains  two  atoms.  When  another 
atom  of  oxygen  is  attached  to  the  molecule  we  have  ozone-.  The 
affinity  for  the  third  atom  is  feeble  and  the  molecule  parts 
with  it  when  brought  into  contact  with  a  substance  for  which 
it  has  an  affinity  and  it  is  due  to  this  atom  of  oxygen  separating 
in  a  nascent  condition  that  ozone  is  so  effective  as  a  deodorizer. 
The  chemical  union  of  two  or  more  elements  into  a  molecule 
forms  a  chemical  compound  as,  water  H2O,  carbon  monoxide 
CO,  and  carbon  dioxide  CO2. 

Acids. 

Acids  are  very  important  chemical  compounds.  They 
contain  hydrogen  which  can  be  replaced  by  a  metal,  as  for 
example  HCl  (muriatic  or  hydrochloric  acid)  which  when 
allowed  to  act  on  zinc  forms  zinc  chloride,  ZnCU,  as  follows: 
Zn+2HCl  =  ZnCl2+H2  in  which  zinc  has  replaced  the  hydrogen 
of  the  acid  and  the  latter  appears  as  a  gas. 

Bases  and  Salts. 

What  are  known  as  bases  are  compounds  which  uniting 
chemically  with  an  acid  form  a  salt.  They  usually  contain 
oxygen  combined  with  the  metal,  sometimes  both  oxygen  and 
hydrogen,  examples  NaOH,  sodium  hydrate  or  caustic  soda, 
ZnO,  zinc  oxide.  Thus  ZnO  +  2HCl  =  ZnCl2+H20,  that  is, 
zinc  chloride  and  muriatic  acid  form  zinc  chloride  and  water. 
From  the  foregoing  it  is  apparent  that  a  salt  is  produced  by  the 
union  of  an  acid  and  base. 

Gases. 

Gases  consist  of  molecules  separated  by  distances  which 
are  great  in  comparison  with  the  size  of  the  molecules.  The 
kinetic  theory  of  gases  assumes  that  the  molecules  are  in  con- 
stant motion,  colliding  with  each  other  and  with  walls  of  the 
containing  vessel.  The  pressure  of  gases  is  due  to  this  condition. 
When  a  gas  is  heated  the  rate  of  oscillations  increases  and  conse- 
quently the  number  of  collisions  or  impacts,  and  is  manifested 
by  increased  pressure  if  the  volume  remains  constant, 
or  by  increased  volume  if  the  pressure  remains  constant.     The 


24 

increase  in  volume  equals  1/273  of  the  volume  at  zero,  Centigrade, 
for  each  degree  Centigrade  the  temperature  is  raised  above  that 
point. 

The  volume  of  a  gas  varies  inversely  as  the  pressure,  that 
is,  if  a  given  volume  be  compressed  to  one-half  the  volume, 
the  pressure  is  doubled,  and  conversely  if  a  volume  is  allowed 
to  expand  to  two  volumes  the  pressure  is  halved. 

Vapor  Density. 

Vapor  density  is  the  ratio  of  the  weight  of  a  given  volume 
of  any  particular  gas  compared  with  air  or  with  hydrogen. 
Thus,  carbon  dioxide  gas  is  about  three  times  as  heavy  as  air 
and  22  times  as  heavy  as  hydrogen,  and  its  vapor  density  would 
be  3,  or  22,  depending  upon  whether  it  was  compared  with  air 
or  hydrogen. 

Diffusion  of  Gases. 

Diffusion  of  gases  is  the  property  of  mutually  diffusing  or 
mixing  with  each  other  even  though  their  vapor  density  vary 
as  noted  above.  It  is  owing  to  this  characteristic  that  the 
atmosphere  is  always  constant  though  composed  of  two  gases, 
oxygen  and  nitrogen. 

Liquids. 

Liquids  differ  from  gases  in  that  the  molecules  are  nearer 
each  other,  but  free  to  move  in  any  direction  at  or  below  the 
surface. 

Vapor  pressure  or  vapor  tension  is  a  characteristic  of 
liquids,  and  causes  evaporation.  It  increases  with  the  tempera- 
ture and  when  it  equals  the  external  pressure  upon  the  surface 
of  the  liquid,  we  say  the  liquid  boils.  Thus  the  boiling  point 
of  water  at  normal  atmospheric  pressure  is  212°  Fahr.  or  100° 
Cent.,  alcohol  173°  Fahr.  or  78°  Cent.,  and  carbon  disulphide 
117°  Fahr.  or  47°  Cent.  If  the  pressure  upon  the  surface  of  the 
liquid  be  increased  the  boiling  point  is  raised,  and  if  the  pressure 
be  reduced  the  boiling  point  is  lowered. 

Solids. 

Solids  differ  from  liquids  in  that  the  molecules  so  influence 
each  other  that  under  normal  conditions  the  shape  of  the  mass 
remains  unchanged. 

When  a  solid  changes  to  a  liquid,  heat  is  absorbed  by  it; 
example  —  melting  ice  or  melting  metal.  When  a  liquid  is 
changed  to  a  gas  or  vapor,  heat  is  absorbed,  as  when  water  is 
changed  to  steam.  Conversely,  when  a  gas  or  vapor  changes 
to  a  liquid  heat  is  given  off;    example  —  steam,  when  utilized 


25 

for  heating,  gives  up  its  heat,  is  changed  to  water  and  returns 
to  the  boiler.  Also  when  water,  a  liquid,  freezes  and  becomes 
a  solid,  it  gives  up  heat  to  the  surrounding  air  or  objects  before 
it  solidifies. 

Molten  metals  must  give  out  heat  before  solidifying. 

All  chemical  changes  such  as  formation  of  compounds,  or 
breaking  up  of  such  are  known  as  chemical  reactions,  and  are 
accompanied  either  by  generation  or  absorption  of  heat. 

Exothermic  Reaction. 

Exothermic  reactions  are  those  in  which  heat  is  given  out. 

Endothermic  Reaction. 

Endothermic  reactions  are  those  in  which  heat  is  absorbed. 

As  a  general  rule,  a  compound  the  reaction  of  whose  forma- 
tion was  endothermic  is  much  less  stable  than  one  which  was 
exothermic.  In  the  former  case  energy  was  absorbed  and  this 
energy  will  be  given  out  under  favorable  conditions. 

Oxidation. 

Oxidation  is  the  combination  or  union  of  oxygen  with  a 
substance,  as  when  iron  is  heated  in  air  or  when  it  rusts.  Oxi- 
dation generates  heat  which  may  be  evident  or  not  according 
to  the  rapidity  of  the  oxidation.  The  total  amount  of  heat 
generated  by  the  complete  oxidation  of  a  given  amount  of  a 
particular  substance  is  the  same  whether  the  oxidation  be  slow 
or  rapid.  Thus  a  given  weight  of  charcoal  will  produce  the 
same  amount  of  heat  whether  it  be  burned  in  the  air,  or  more 
rapidly  in  oxygen. 

Combustion. 

The  union  of  oxygen  with  substances,  if  accompanied 
by  heat  and  fire  or  flame,  is  what  is  generally  understood  by 
the  term  combustion.  There  are  some  substances  whose  union 
without  oxygen  produce  heat  and  flame,  and  which  is  properly 
called  combustion,  but  they  are  few  and  do  not  interfere  with 
the  common  acceptance  of  the  term. 

Since  oxygen  is  present  in  our  atmosphere,  and  what  are 
known  as  inflammable  substances  combine  with  it  and  burn, 
oxygen  is  called  a  supporter  of  combustion.  The  term  is  only 
relative,  however,  as  oxygen  will  burn  in  an  atmosphere  of  any 
gas  which  would  burn  in  it. 

Combustion  may  occur  with  or  without  flame.  In  order 
to  create  flame,  part  or  all  of  the  substance  undergoing  combus- 
tion must  be  a  gas  or  evolve  a  gas,  and  must  burn  in  an  atmos- 
phere of  a  gas  with  which  chemical  union  can  occur. 


26 

Rapidity  of  combustion  may  vary  widely.  Thus  combustion 
may  occur  without  flame,  in  which  case  we  say  it  smoulders, 
or  it  may  be  accompanied  by  flame  and  be  so  rapid  that  it 
may  be  explosive.  The  term  explosion  is  carelessly  used  in 
describing  fires  which  may  be  only  rapid  combustion. 

There  is  no  sharp  line  of  separation  between  very  rapid 
combustion  and  explosion,  but  the  term  explosion,  when  accom- 
panied by  flame,  as  generally  understood,  is  a  condition  in 
which  a  rapid  and  great  increase  of  volume  occu'rs.  That  is, 
where  a  solid  or  solids  are  converted  into  a  large  volume  of 
gas  exerting  pressure,  or  where  vapors  or  gasses  combine  and 
the  heat  generated  expands  them  with  consequent  great  increase 
of  pressure. 

Gasoline    and   various    other   volatile   inflammable    liquids 
are   not   explosive.      They   are   inflammable   and   their   vapors 
mixed  with  air  in  certain  proportions  are  explosive. 
Approximately : 

Gasoline  vapor  and  air  is  explosive  when  gasoline  vapor 
equals  2  to  7%.* 

Ether  vapor  and  air  is  explosive  when  ether  vapor  equals 
3  to  7.5%. 

Alcohol  vapor  and  air  is  explosive  when  alcohol  vapor 
equals  4  to  13%. 

Carbon  disulphide  vapor  and  air  is  explosive  when  carbon 
disulphide  vapor  equals  3  to  6%. 

Coal  gas  and  air  is  explosive  when  gas  equals  7  to  30%. 

Acetylene  and  air  is  explosive  when  acetylene  equals  3 
to  35%. 

Thus  in  a  mixture  of  air  and  inflammable  vapor  in  which 
the  proportion  of  vapor  to  air  is  less  than  the  minimum  the  mix- 
ture may  be  inflammable  but  not  explosive.  As  the  proportion 
of  vapor  increases  the  explosive  effect  increases  to  a  certain 
point  beyond  which  a  further  increase  of  vapor  lessens  the 
effect  until  the  limit  of  the  proportion  is  reached.  Beyond 
this  limit  the  mixture  owing  to  insufficient  air  is  no  longer 
explosive  although  it  is  of  course  inflammable. 

Ignition  Point  and  Heat  of  Combustion. 

The  ignition  point  is  the  temperature  at  which  if  a  substance 
be  heated  in  air  it  will  ignite.  It  does  not  require  contact  with 
flame  or  fire.  The  approximate  ignition  point  of  yellow  phos-. 
phorus  is  113°-140°F.;  of  carbon  disulphide  300°;  of  charcoal 
572°  upwards;  of  sulphur  480°;  of  acetvlene  900°;  of  coal  gas 
1,150°. 

Heat  of  combustion  is  the  temperature  created  by  the  com- 
bustion of  a  substance.    It  is  evident  that  if  the  heat  of  combus- 

*  The  explosive  range  of  gasoline  is  quoted  by  some  as  from  2  to  14%.  This  is  probably- 
due  to  the  fact  that  gasoline  is  not  a  definite  compound,  but  a  mixture  of  various  compounds 
and  therefore  samples  vary. 


27 

tion  be  greater  than  the  temperature  of  ignition,  the  combustion 
once  started  will  continue.  On  the  other  hand  if  the  heat  of 
combustion  be  less  than  the  temperature  of  ignition  the  com- 
bustion will  cease  unless  it  be  aided  by  external  heat  supplied 
to  the  substance. 


Spontaneous  Ignition. 

This  is  defined  as  ignition  produced  by  the  development 
of  heat  within  the  substance  or  mass,  without  the  aid  of  an 
external  agent.  The  most  common  cause  of  spontaneous  ignition 
is  the  oxidation  of  a  drying  oil,  that  is  an  oil  possessing  the 
property  of  drying  or  hardening.  Linseed  oil  is  an  example 
of  such  an  oil.  The  conditions  most  favorable  for  spontaneous 
ignition  are  those  in  which  the  oil  can  have  a  large  surface  exposed 
to  the  air,  as  in  rags  or  cotton  waste,  and  the  mass  so  arranged 
that  the  heat  generated  in  the  interior  by  oxidation  may  accu- 
mulate. The  heat  generated  at  the  surface  of  the  mass  is  radiated, 
but  the  temperature  of  the  interior  raay  easily  rise  to  the  point 
of  ignition. 

Animal  and  vegetable  oils  are  most  hazardous,  but  mineral 
oils,  on  waste  and  rags,  as  ordinarily  used,  may  contain  finely 
divided  metal  and  other  foreign  matter  and  are  hazardous. 

All  animal  and  vegetable  oils  consist  of  glycerine  as  a  base 
combined  with  fatty  acids,  and  so  may  be  considered  as  salts. 
By  saponification  these  acids  may  be  separated  from  the  gly- 
cerine. Saponified  red  oil  used  in  woolen  mills  for  oiling  stock, 
consists  largely  of  oleic  acid,  one  of  the  fatty  acids,  is  about 
as  hazardous  as  linseed  oil  when  material  such  as  cotton  rags 
or  waste  is  impregnated  with  it.  Upon  wool,  however,  it  is 
not  hazardous,  for  although  the  temperature  rises  considerably 
it  drops  again  without  causing  ignition.* 

Cutting  board  scrapings  as  removed  from  the  cutter's 
blocks  in  shoe  factories  are  impregnated  with  drying  oils,  and 
in  a  mass  afford  ideal  conditions  favoring  spontaneous  ignition. 

Vegetable  substances,  such  as  jute,  hay,  straw,  etc.,  may 
ignite  spontaneously,  due  to  fermentation  of  the  resinous  and 
gummy  constituents  raising  the  temperature  to  a  point  at 
which  chemical  union  and  ignition  can  occur.  The  fermentation 
is  probably  due  to  bacteria,  f 

Finely  divided  metal  or  metallic  powders  if  slightly  mois- 
tened and  especially  if  mixed  with  dust  or  inflammable  material 
may  cause  ignition.  Zinc  dust,  and  aluminum  and  magnesium 
powders  are  especially  hazardous,   and  should  always  be  kept 

*  See  article  on  Saponified  Red  Oil,  National  Fire  Protection  Association  —  Special 
Hazards  Bulletin  No.  12,  p.  35. 

t  For  description  of  Mackey  Cloth  Oil  Tester  used  in  testing  oil  for  spontaneous 
ignition  hazard  see  article  on  Saponified  Red  Oil,  above  cited. 


28 

in  containers  of  glass  or  metal  which  will  positively  exclude 
moisture.  It  is  hardly  necessary  to  state  that  these  powders, 
if  very  fine  and  diffused  through  the  air  in  a  room,  may  if  ignited 
explode  with  violence. 

Charcoal. 

When  wood  is  heated  with  insufficient  air  to  produce 
complete  combustion,  as  in  a  retort,  the  volatile  matters  are 
driven  off  and  practically  only  the  carbon  and  mineral  matter 
originally  present  in  the  wood  remain,  forming  charcoal. 

Charcoal  is  very  porous  and  when  freshly  burned  possesses 
the  property  of  absorbing  several  times  its  bulk  or  volume  of 
oxygen,  and  certain  other  gases  within  its  pores.  The  values 
usually  given  are,  oxygen  9  times,  hydrogen  sulphide  55  times, 
and  dry  ammonia  gas  90  times  the  volume  of  the  charcoal. 
This  compression  of  gas  produces  the  same  liberation  of  heat 
as  if  compressed  mechanically  and  may  aid  the  ignition  of  the 
charcoal. 

Charcoal  produced  at  a  low  temperature,  that  is,  about 
450°  to  500°  F.  is  known  as  pyrophoric  charcoal.  The  process 
is  not  complete  and  in  this  condition  the  charcoal  is  likely 
to  ignite  spontaneously. 

Volatile  Inflammable  Liquids. 

Many  such  compounds  are  in  quite  general  use,  of  which 
wood,  denatured,  and  ordinary  grain  alcohol,  gasoline  and 
naptha  are  famiHar  to  all. 

The  alcohols  above  named  are  miscible  with  water  and  are 
more  rapidly  extinguished  by  water  if  ignited,  than  liquids 
which  are  not  miscible  and  which  float  upon  the  surface. 

Carbon  disulphide  is  heavier  than  water  and  therefore 
will  not  float.  It  is,  however,  one  of  the  most  hazardous  vola- 
tiles,  for  in  addition  to  its  volatility  its  ignition  point  is  very 
low,  about  300°  F. 

Acetone  is  a  liquid  of  the  alcohol  class,  and  as  found  in 
trade  has  a  flash  point  of  about  32°  F. 

Amyl  acetate  is  an  ether  formed  by  combining  Amyl  alcohol 
and  acetic  acid  and  is  used  in  the  manufacture  of  lacquers, 
artificial  leather,  and  as  a  solvent  for  soluble  nitro  or  gum 
cotton  for  many  purposes.  It  is  not  miscible  with  water  and 
its  flash  point  may  vary  from  60°  to  70°  F. 

Hydrocarbons. 

Petroleum  yields  by  fractional  distillation  various  com- 
pounds which  as  a  class  are  known  as  hydrocarbons,  as  they 
consist  of  hydrogen  and  carbon.  The  more  volatile  ones  are 
in  a  state  of  vapor  or  gas  at  ordinary  temperatures  and  are 


29 

rarely  met  with.  The  more  common  are  petroleum-ether, 
gasoline,  benzene,  ligroine  and  naptha.  There  is  a  difference 
in  their  boiling  points,  some  boiling  at  lower  temperatures 
than  others  and  are  consequently  somewhat  more  hazardous, 
but  as  the  flash  points  of  all  of  them  are  low,  the  difference  is 
generally  of  little  consequence. 

Another  group  of  hydrocarbons  is  obtained  by  the  dis- 
tillation of  coal  tar  and  from  coal  gas.  Among  the  more  volatile 
ones  are  benzole,  toluol,  and  zylene,  and  these  are  present  in 
what  are  known  as  "light  oils,"  the  lower  or  first  liquids  coming 
over  in  the  distillation. 

There  is  practically  no  difference  in  the  hazards  of  the 
two  classes  of  hydrocarbons  of  the  same  flash  points. 

The  petroleum  or  open  chain  hydrocarbons  are  scarcely 
affected  by  chemicals,  even  the  strong  acids.  The  coal  tar 
or  closed  chain  compounds,  however,  are  easily  acted  upon  by 
acids  and  always  with  the  evolution  of  heat  and  consequently 
of  inflammable  vapor.  The  relative  hazards  of  inflammable 
volatiles  are  determined  largely  by  their  flash  points. 

The  flash  point  is  the  temperature  at  which  an  inflammable 
volatile  gives  off  sufficient  vapor  to  ignite  if  a  small  flame  is 
brought  into  contact  with  the  vapor.  The  liquid  does  not 
ignite  at  this  temperature.  The  flame  must  be  very  small  in 
order  not  to  heat  the  vapor,  and  the  test  may  be  made  in  either 
an  open  or  closed  cup  apparatus.  The  flash  point  is  generally 
a  few  degrees  higher  in  the  former  apparatus. 

The  fire  or  burning  point  is  the  temperature  at  which  the 
liquid  will  ignite  under  same  conditions  of  flame  contact, 

A  good  grade  of  kerosene  oil  has  a  flash  point  of  about 
100°  F.  while  carbon  disulphide  flashes  at  about  29°  below  zero  F. 
•  In  addition  to  the  flash  point  the  vapor  density  of  inflam- 
mable volatiles  is  an  important  matter  in  considering  their 
hazard. 

Acids. 

Acids  such  as  acetic  and  hydrochloric  ordinarily  are  not 
hazardous.  Nitric  and  sulphuric  acids  are  the  most  hazardous 
of  the  strong  acids.  Nitric  acid  readily  gives  up  part  or  all  of 
its  oxygen  if  brought  into  contact  with  substances  for  which 
it  has  an  affinity,  and  which  if  inflammable  may  be  ignited. 
The  brown  nitrous  fumes  given  off  when  strong  nitric  acid  is 
brought  into  contact  with  some  substances  may,  if  brought 
into  contact  with  materials  such  as  cotton  cause  their  ignition. 

Strong  sulphuric  acid  evolves  heat  when  it  absorbs  moisture 
or  water,  or  when  in  contact  with  substances  from  which  it 
can  abstract  hydrogen  and  oxygen  in  the  proportions  necessary 
to  form  water.  Strong  acids  should  not  be  stored  in  basements 
or   cellars   unless   proper   drains   are   provided,   and   means   for 


30 

flushing  out  the  acids  in  case  the  carboys  or  containers  should 
be  broken.  Strong  nitric  acid  fumes  are  very  dangerous  if 
inhaled  and  may  result  in  loss  of  life  to  firemen. 

Oxygen  Carriers. 

Nitrates,  chlorates,  and  peroxides  are  known  as  oxygen 
carriers  and  contain  oxygen  which  they  readily  give  up  under 
favorable  conditions  to  any  oxidizable  substance,  and  are 
likely  to  cause  ignition.  They  are  always  a  hazard  when  in 
contact  with  inflammable  material. 

Sodium  peroxide  when  combining  with  water  evolves 
much  heat  and  if  quantity  of  water  is  small  as  compared  with 
peroxide,  and  it  is  in  contact  with  inflammable  material  generally 
causes  ignition.  If  the  quantity  of  water  is  large  the  heat  is 
absorbed  by  the  water  without  danger,  and  the  liquid  resulting 
is  simply  a  solution  of  sodium  hydrate  or  caustic  soda.  It 
is  used  for  bleaching  purposes  and  if  used  intelligently  by  those 
familiar  with  its  hazards  it  is  relatively  safe.  It  should  not 
be  stored  in  a  damp  location  and  it  is  not  hazardous  if  heated, 
unless  in  contact  with  combustible  material. 

NiTROCOTTON  AND  CELLULOID. 

Nitrocotton,  pyroxylin,  soluble  gun  cotton,  and  collodion 
cotton  are  names  applied  to  cotton  which  has  been  treated  in 
a  mixture  of  nitric  and  sulphuric  acids.  The  sulphuric  acid 
does  not  enter  into  the  reaction  but  absorbs  the  water  formed 
and  so  prevents  the  dilution  of  the  nictric  acid.  Although  not 
as  powerful  an  explosive  as  the  explosive  guncotton  it  is  capable 
of  generating  considerable  force  when  ignited  and  should  not 
be  kept  or  stored  in  a  dry  state.  When  containing  20%  of 
water  it  will  not  ignite  if  brought  into  contact  with  flame  until 
the  moisture  has  been  driven  off.  If  the  nitrocotton  has  not 
been  completely  freed  from  the  nitric  acid  it  may  decompose 
and  spontaneously  ignite. 

Nitrocotton  dissolved  in  amyl  acetate  forms  the  basis 
of  most  of  the  lacquers  used  for  coating  metals.  The  solution 
is  no  more  hazardous  than  the  solvent  used,  that  is  the  inflam- 
mable volatile  is  the  hazard  and  not  the  cotton. 

Notrocotton  combined  with  camphor  forms  the  compounds- 
known  as  pyroxylin  plastics  and  irrespective  of  the  make  are 
commonly  called  celluloid.  Celluloid  is  not  explosive,  as  the 
camphor  has  a  retarding  action.  It  gives  out  much  heat  in 
burning,  and  when  heated  slowly  to  a  temperature  of  from  about 
250  to  340  degrees  F.,  the  decomposition  may  be  attended 
with  flame,  and  some  explosive  force  if  the  ratio  of  air  be  favor- 
able.     Celluloid  requires  air  for  its  combustion  and  will   not 


31 

burn  in  its  absence;  it  will,  however,  decompose  evolving 
gas  and  leaving  a  residue.  Celluloid  can  be  extinguished  by- 
water  if  the  ratio  of  water  to  celluloid  be  great  enough  to  produce 
the  necessary  cooling  effect. 

Nitrocotton  is  also  used  in  the  production  of  artificial 
leather.  The  cotton  dissolved  in  a  solvent,  usually  amyl  acetate, 
is  mixed  with  castor  oil  and  pigments  and  applied  to  the  fabric. 
The  resulting  product  is  not  much  more  inflammable  than  other 
oil  coated  fabrics,  and  so  far  as  known  does  not  present  the 
hazard  of  spontaneous  ignition. 

Picric  acid  (trinitriophenol)  is  a  salt  formed  by  nitrating 
phenol,  commonly  called  carbolic  acid.  It  is  a  yellow  salt 
used  to  some  extent  as  a  dye,  and  as  one  of  the  so-called  inter- 
mediates, from  which  other  dyes  are  formed.  It  is  also  employed 
extensively  in  connection  with  other  salts  in  the  manufacture 
of  high  explosives.  Ordinarily  when  ignited  it  burns  with  a 
smoky  flame  and  without  explosion.  When  heated  it  partially 
vaporizes  and  the  heated  vapor  may  explode.  It  can  be  exploded 
by  a  detonator.  It  should  be  kept  in  a  moist  condition,  10% 
water.     The  salts  of  picric  acid  are  explosive. 

Trinitrotoluene  is  produced  like  picric  acid  by  nitrating 
toluene,  is  used  similarly  as  a  high  explosive  and  should  be  kept 
in  a  moist  condition. 

Hazards  of  Experimental  Work. 

Experimental  operations  involving  the  use  of  chemicals 
in  the  hands  of  inexperienced  persons  are  always  attended  with 
danger.  Some  powerful  explosives  are  easily  produced  from 
simple  substances.  Thus  potassium  chlorate  and  various  organic 
substances,  such  as  sugar,  can  be  exploded  by  a  blow,  iodine 
and  strong  ammonia  form  nitrogen  iodine,  a  compound  which 
when  dry  can  be  exploded  by  a  gentle  heat  or  even  by  the  fric- 
tion of  a  feather.  When  a  solution  of  mercury  in  nitric  acid 
is  poured  into  alcohol,  mercury  fulminate  is  formed.  This  is 
the  compound  which  is  employed  in  the  manufacture  of  primers 
and  detonators  for  blasting  caps.  When  an  electric  current 
is  passed  through  a  saturated  solution  of  ammonium  chloride 
nitrogen  chloride  is  formed,  a  powerful  explosive  of  an  oily 
nature,  and  which  in  contact  with  oils,  turpentine  and  other 
bodies  will  explode  with  violence. 

A  solution  of  phosphorus  in  carbon  disulphide  forms  a 
solution  which  poured  upon  inflammable  material  will  cause 
its  ignition  upon  the  evaporation  of  the  solvent. 

Reference  Readings. 

Harris.  Technological  Dictionary  Insurance  Chemistry,  Phoenix 
Fire  Office,  Liverpool,  Eng. 

Special  Hazard  Bulletin  No.  3.  National  Fire  Protection  Associa- 
tion, Boston,  Mass. 


32 

Sadtler.     Industrial  Organic  Chemistry. 

Underwriters'  Bureau  of  New  England.  Rep.  No.  158.  Nitration 
products  of  cotton  and  benzol,  and  preparation  of  raw  materials.  By 
J.  Albert  Robinson.     Pamphlet.     48  pages.     1915. 

Von  Schwartz.  Fire  and  Explosion  Risks.  J.  B.  Lippincott  Co., 
Phila. 

On  Pyroxylin  Plastics: 

Special  Hazard  Bulletin  No,  1,  National  Fire  Portection  Association. 

Quarterly  Bulletin  No.  8,   National  Fire  Protection  Association. 

Quarterly  Bulletin,  Vol.  2,  No.  3,  National  Fire  Protection  Asso- 
ciation. 


Corresf)ondence 

BY 

R.  M.  BISSELL 

Business  Correspondence. 

The  suggestions  and  observations  contained  in  this  paper 
are  intended  primarily  for  those  whose  duties  include  corre- 
spondence with  agents,  policyholders,  and  possibly  field  men, 
all  under  the  jurisdiction  of  the  head  office  of  an  insurance 
company.  In  other  words,  we  are  talking  from  the  home  office 
point  of  view.  It  is  hoped  however,  that  these  comments  and 
suggestions  may  be  useful  to  some  extent  also  to  those  who 
are  engaged  in  other  departments  of  insurance  work. 

The  correspondence  which  emanates  from  the  home  office 
of  an  insurance  company  affects  the  progress  and  standing  of 
that  company  to  an  extent  which  is  often  overlooked  or  not 
appreciated.  We  must  remember  that  the  letters  which  go 
out  from  the  various  company  offices  every  working  day  of  the 
year  have  —  and  this  is  true  of  every  letter  which  goes  out  — 
a  certain  definite  effect  upon  the  receivers  thereof.  This  effect 
is  not  always  just  what  is  intended  by  the  writer,  who  in  the 
hurry  of  business  does  not  stop  to  think  perhaps  how  his  letter 
will  appear  when  read  by  eyes  considering  the  subject  in  hand 
from  another  point  of  view  than  that  of  the  home  office.  It 
is  not  too  much  to  say  that  home  office  correspondence  is  a 
very  powerful  influence  in  the  acquisition,  maintenance,  and 
proper  conduct  of  the  business  of  every  company. 

It  will  be  well  to  have  in  mind  as  we  consider  this  subject  — 
and  it  would  be  well  to  keep  always  in  mind  when  writing  letters 
—  some  definition  of  a  letter.  What  is  a  letter?  And  what 
is  its  purpose?  A  letter  may  be  incompletely  defined  as  an 
instrumentality  for  transferring  thought  from  one  person  to 
another  by  means  of  written  language.  The  essential  part  of 
this  definition  of  course  is  to  be  found  in  the  words  "transferring 
thought."  Since  the  purpose  of  letters  is  to  convey  thoughts 
it  follows  that  letters  fail  of  their  purpose  to  the  extent  that 
they  fail  to  convey  accurately  the  thoughts  in  the  mind  of  the 
writer  at  the  time  when  the  letters  are  written. 

Formerly  a  large  and  well-known  book-store  in  Chicago 
had  painted  on  its  window  shades,  which  were  always  decorously 
pulled  down  on  Sunda3^s,  the  following  text:  "Words  are  the 
only  things  that  live  forever."     Sometimes  it  seems  as  though 


34 

this  text  had  especial  reference  to  those  occasional  letters  which 
tactlessly  written  or  stupidly  expressed  steal  quietly  out  from 
the  home  office  of  an  insurance  company  and  lead  indefinitely 
thereafter  harmful  and  malevolent  lives  in  the  minds  of  their 
receivers. 

The  spoken  word  cannot  indeed  be  recalled  but  its  meaning 
is  tempered  or  emphasized,  softened  or  driven  home  by  accent 
and  intonation  and  even  more  perhaps  by  the  facial  expression 
and  the  glance  which  accompanies  it.  Again,  we  can  usually 
quickly  measure,  in  part  at  least,  the  effect  of  our  spoken  remarks 
and  can  supplement  them  if  need  be  by  explanations  which  will 
cure  or  mitigate  any  wrong  impressions  which  they  might  other- 
wise have  caused.  Not  so  with  our  written  utterances.  They 
go  forth  in  cold  type  without  helpful  explanation  and  with  no 
cordial  smile  to  soften  them.  They  become  a  permanent  influence 
not  only  upon  those  who  receive  them  but  upon  ourselves  — 
who  are  often  to  a  greater  extent  than  we  would  wish  committed 
by  them  to  an  attitude  or  to  a  policy  which  is,  on  subsequent 
thought,  by  no  means  satisfactory  to  us.  In  one  of  his  earHer 
essays  Robert  Louis  Stevenson  says:  "Talk  is  fluid,  tentative, 
continually  in  further  search  and  progress,  while  written  words 
remain  fixed,  become  idols  even  to  the  writer."  That  is  a  very 
true  and  illuminating  sentence  and  defines  with  admirable 
clearness  the  distinction  I  have  been  trying  to  set  forth.  It 
is  largely  because  letters  are  not  fluid  and  tentative  but  on  the 
contrary  are  fixed  and  predestined  to  convey  definite  impres- 
sions that  the  skill  or  lack  of  it  with  which  they  are  written 
becomes  so  vital  a  matter.  There  are  other  considerations, 
some  of  which  will  appear  later  on,  which  make  the  proper 
conduct  of  correspondence  in  our  business  of  especial  impor-, 
tance. 

Now,  let  us  consider  some  of  the  more  obvious  qualifications 
of  good  business  correspondence.  In  their  order  of  merit  and 
importance  it  seems  to  me  these  most  essential  characteristics 
could  be  listed  as  follows : 

1.  Clarity. 

2.  Discretion. 

3.  Courtesy. 

4.  Form,  i.  e.,  proper  use  of  the  English  Language. 

Of  these  the  first  is  naturally  of  by  far  the  greatest  impor- 
tance, even  though  it  is  true  that  a  letter  may  be  very  clear 
and  at  the  same  time  very  objectionable.  But  clearness  we  must 
have  at  any  cost.  A  good  many  things  are  involved  in  this 
matter  of  clearness.  In  the  first  place,  clear  thinking  is  necessary 
for  clarity  in  writing.  If  you  do  not  have  a  definite  understand- 
ing of  a  proposition  in  your  own  mind  you  can  hardly  hope  to 
give  a  correct  idea  of  it  to  another.  Indeed,  I  am  inclined  to 
believe  that  lack  of  clearness  proceeds  more  often  from  a  corre- 


35 

spondent's  muddiness  of  thought  than  from  any  other  one 
cause,  although  another  factor,  namely:  ignorance  of  and  lack 
of  training  in  the  meaning  and  use  of  words,  prevents  many 
intelligent  men  from  writing  good  letters. 

The  extent  to  which  many  words  are  used  by  people  who 
fail  to  apprehend  their  meaning  is  enormous.  Most  of  us  have 
a  few  words  in  our  vocabularies  the  real  meanings  of  which  are 
rather  hazy  in  our  minds,  and  many  of  us  have  very  long  lists 
of  such  words.  It  is  a  good  rule  never  to  use  a  word  in  a  letter 
unless  you  know  quite  definitely  what  it  means,  and  if  you  will 
take  the  trouble  to  look  up  in  a  good  dictionary  many  of  those 
words  which  you  like  to  use  but  concerning  whose  meanings 
your  knowledge  is  not  complete  you  will  find  that  you  have 
probably  been  conveying  by  your  use  of  the  words  ideas  to  your 
correspondents  which  you  by  no  means  intended  they  should 
receive  from  your  letters.  We  all  have  run  across  some  instances 
of  the  mistaken  use  of  words  highly  enjoyed  by  their  users 
on  account  of  their  leilgth,  sonorous  sound,  or  foreign  derivation, 
which  are  absurd,  grotesque,  and  occasionally  very  amusing. 
But  consider  how  such  a  faulty  use  of  words  is  likely  to  delay 
or  impede  the  accurate  transferrence  of  thought  from  one  person 
to  another.  I  have  one  correspondent  who  is  very  fond  of  the 
word  "mitigate"  and  uses  it  on  every  possible  occasion  and 
almost  invariably  erroneously.  In  his  mind  mitigate  means 
about  the  same  as  the  expressions  "is  a  factor"  or  "makes  for." 
He  would  be  very  likely  to  say,  "One  of  the  unfavorable  factors 
which  will  mitigate  against  us  this  year,  etc."  You  all  have 
seen  examples  which  even  more  closely  resemble  the  language 
of  Mrs.  Malaprop  than  this.  Better  use  always  the  common- 
place word  you  are  sure  of  rather  than  some  more  elegant  one 
of  whose  meaning  you  are  not  entirely  certain. 

There  are  one  or  two  bad  habits  which  prevent  us  often 
from  presenting  our  thoughts  as  clearly  and  distinctly  as  we 
should  like  to  do.  The  most  common  of  these  habits  are  the 
practice  of  using  adverbs  and  adjectives  improperly  and  indis- 
criminately, and  the  mishandling  and  particularly  the  mis- 
placing of  the  relative  pronouns.  The  little  word  "that" 
especially  has  a  most  mischievous  way  of  locating  itself  at  the 
wrong  places  in  our  sentences  and  must  be  closely  watched 
and  kept  under  strictest  control.  Explanatory  phrases,  paren- 
thetical in  nature,  often  break  up  an  otherwise  well  formed 
sentence  and  destroy  its  effect.  Such  things  are  real  handicaps 
to  expression  and  only  careful  attention  and  study  will  prevent 
them. 

Included  in  this  matter  of  clearness  is  the  necessity  for  the 
definite  expression  of  a  decision  which  your  letter  is  intended 
to  record  or  for  definiteness  in  the  statement  of  the  questions 
which  your  letter  asks.  This  needs  but  to  be  mentioned  to  be 
understood.      Nothing   makes   more   for   the   iinnecessary   pro- 


56 

longation  of  a  correspondence  than  half  questions  and  quaUfied 
decisions.  Be  sure  that  your  own  thought  is  conveyed  in  unmis- 
takable terms  and  language,  and  in  this  connection  it  is  worth 
remembering  that  your  correspondent  may  not  and  probably 
does  not  know  all  the  facts  and  circumstances  which  have  led 
you  to  your  conclusion  so  that  while  brevity  is  an  important 
requisite  it  is  a  mistake  to  so  condense  your  letter  that  a  corre- 
spondent, who  is  not  so  familiar  as  you  are  with  all  the  facts 
or  who  perhaps  has  not  had  the  advantage  of  your  training 
and  experience  in  the  insurance  business,  will  fail  to  grasp  the 
reasonableness  of  the  attitude  taken  by  you,  if  indeed  he  does 
not  altogether  miss  the  point  of  your  letter.  In  other  words, 
let  your  letters  be  tempered  by  consideration  for  the  knowledge 
and  experience  of  the  persons  to  whom  you  write. 

It  is  particularly  important  that  every  letter  which  contains 
instructions  should  be  unmistakably  definite  whether  the 
instructions  refer  to  the  cancellation  of  a  contract  or  the  authori- 
zation of  risks.  It  must  be  remembered  also  that  in  our  business 
much  of  our  correspondence  has  to  do  with  matters  and  trans- 
actions which  are  governed  by  contracts  highly  technical  in 
their  nature.  This  is  another  and  a  most  important  reason 
why  in  our  business  this  matter  of  clarity  is  of  supreme  impor- 
tance. It  is  very  easy  in  a  letter  to  waive  important  provisions 
of  a  contract.  It  is  very  easy  also  to  write  a  letter  which  by 
implication  gives  authority  or  assumes  liability  beyond  the 
intention  of  the  writer.  When  we  insist  therefore  that  great 
care  should  be  taken  to  make  all  such  letters  definite,  we  mean 
not  only  that  they  should  clearly  state  what  the  writer  has  in 
mind  but  that  the  language  used  should  be  such  as  to  limit 
their  application  or  possible  use  strictly  within  the  bounds 
of  the  writer's  intention. 

The  next  prime  requisite  of  good  correspondence  mentioned 
in  our  list  is  discretion,  though  many  would  doubtless  consider 
the  matter  of  courtesy  even  more  important.  It  is  indeed  hard 
to  say  whether  lack  of  courtesy  or  lack  of  discretion  works  more 
havoc  through  our  correspondence.  But  we  will  consider  the 
matter  of  discretion  first.  This  subject  is  to  a  certain  extent 
touched  upon  in  the  topic  which  we  have  just  been  discussing, 
and  several  of  the  cautions  already  urged  are  made  more 
imperative  by  the  importance  and  necessity  of  discretion. 

The  business  of  insurance  —  especially  certain  branches 
of  it,  such  as  fire  insurance,  burglary  insurance,  accident  insur- 
ance, and  some  forms  of  liability  insurance  —  involves  the 
consideration  of  that  great  set  of  factors  collectively  known  as 
the  moral  hazard.  Now,  the  moral  hazard  is  something  which 
is  very  real  but  which  for  obvious  reasons  must  be  handled 
carefully  in  our  letters.  It  will  hardly  do  to  say  that  you  suspect 
an  assured  of  being  a  fire  bug,  a  thief,  or  a  trickster,  though 
possibly  some  such  impression  may  be  very  firmly  fixed  in  your 


37 

own  mind.  Again,  as  an  aid  in  considering  this  question  of 
moral  hazard,  the  records  of  individuals  and  firms  are  collected 
either  by  companies  themselves  or  by  bureaus,  commercial 
agencies  or  individuals  who  make  a  business  of  collecting  such 
records,  records  which  are  consulted  every  day  in  our  offices. 
Usually,  our  contracts  with  the  compilers  of  these  records 
compel  us  to  make  use  of  them  in  the  most  confidential  and 
careful  v/ay  but  unfortunately  this  requirement  is  too  often 
overlooked  by  those  who  are  compelled  in  their  correspondence 
to  convey  instructions  which  are  based  upon  this  confidential 
information.  It  is  highly  improper  of  course  to  refer  directly 
to  such  records  in  correspondence  and  it  is  even  dangerous 
many  times  to  use  such  apparently  harmless  expressions  as 
*'We  learn  that  so  and  so  is  the  case"  and  '*It  is  reported  to  us 
that  the  assured  is  said  to  have  done  this  or  that  dishonest  thing" 
and  "Our  information  is  to  the  effect,  etc."  Very  often  it  is 
necessary  not  to  indicate  in  any  way  the  reasons  which  impel 
you  to  decline  to  accept  or  to  authorize  a  given  risk  or  to  deal 
with  a  particular  individual  or  firm.  If  any  reference  to  this 
confidential  information  at  all  is  made  it  is  wise  to  use  some 
such  expression  as:  "Our  impression  is  that  this  firm  has  had 
an  unfortunate  business  experience"  or  "We  think  you  will 
find  on  investigation  that  this  risk  is  undesirable  in  the  following 
particulars"  or  again  your  correspondent  may  be  asked  to 
make  a  careful  investigation  to  ascertain  whether  or  not  certain 
conditions  exist,  conditions  which  of  course  you  feel  certain 
from  your  confidential  information  do  exist  but  which  you 
do  not  venture  to  allege  for  fear  of  being  asked  to  disclose  the 
source  of  your  information  or  because  you  may  be  called  upon 
to  prove  any  assertions  you  make  in  positive  terms.  There 
are  many  ways  by  which  the  impression  given  by  the  confi- 
dential records  can  be  put  clearly  into  the  mind  of  your  corre- 
spondent without  quoting  the  records  or  even  referring  to  them 
in  any  direct  or  indirect  way.  And  those  whose  duties  make 
it  necessary  for  them  to  consult  and  use  such  sources  of  infor- 
mation should  never  forget  this  very  important  matter.  Other- 
wise, as  has  happened  in  more  cases  than  one,  libel  suits  or  at 
least  very  unfortunate  results  of  another  sort  in  the  way  of 
arousing  hostility  and  bad  feeling  may  be  brought  about. 

In  many  states  there  are  stringent  so-called  Anti-Compact 
Laws.  These  are  usually  aimed  at  fire  insurance  companies 
though  in  not  a  few  instances  the  wording  of  the  statute  is 
so  broad  as  to  include  all  kinds  of  insurance  companies.  These 
laws  generally  are  intended  to  prevent  any  agreement  or  under- 
standing among  companies  which  will  establish  a  fixed  scale 
of  rates  and  it  should  always  be  borne  in  mind  that  corporations 
must  obey  to  the  letter  the  laws  of  the  states  in  which  they 
operate.  In  such  states  —  in  the  case  of  fire  insurance  at  least, 
—  there  usually  exists  bureaus  or  private  firms  which  survey 


38 

the  different  risks  in  those  states  and  pubHsh  what  are  known 
as  estimates  of  rates  at  which  the  individual  risks  may  be  wisely 
underwritten.  Usually  also  most  companies  operating  in  such 
states  purchase  this  information  from  the  bureaus  or  individuals 
who  publish  it  and  base  their  own  quotations  upon  the  infor- 
mation thus  obtained.  It  would  indeed,  occasion  surprise  if 
a  company  ordinarily  cooperating  with  its  associates  in  territory 
where  cooperation  is  permissible  should  in  a  state  where  such 
cooperation  is  forbidden  endeavor  to  secure  business  by  means 
of  quoting  rates  lower  than  those  published  by  the  experts 
engaged  in  surveying  and  recommending  estimates  for  the 
various  risks  in  the  state.  This  is  not  because  of  any  agreement 
between  companies  but  because  any  company  official  who  is 
not  short-sighted  realizes  that  such  a  policy  if  continued  must 
soon  bring  about  chaotic  conditions  as  to  rates  in  the  states 
in  question  so  that  the  advantage  gained  would  be  temporary 
and  by  no  means  commensurate  with  the  subsequent  loss  of 
income  and  profit  which  would  surely  ensue.  Furthermore, 
such  action  might  result  in  destroying  cooperation  in  states 
which  permit  it. 

We  are,  however,  so  accustomed  to  membership  in  the 
various  organizations  maintained  by  insurance  companies 
and  their  agents  that  we  fall  into  habits  of  speech  which  some- 
times lead  us  to  write  very  dangerous  letters.  For  instance, 
it  has  repeatedly  come  to  my  knowledge  that  letters  have  gone 
out  from  the  offices  of  insurance  companies  referring  to  the 
advisory  estimates  above  mentioned  as  "tariff  rates,"  even  as 
"local  board  rates,"  and  some  letters  have  been  found  stating 
that  the  company  could  not  accept  business  at  less  than  the 
"regular  bureau  rates."  What  will  be  the  opinion  of  state 
officials  who  discover  a  number  of  such  unwisely  worded  letters 
in  the  hands  of  a  single  agent  and  referring  perhaps  to  the  same 
risk?  Will  they  not  think  and  with  reason  that  the  companies 
from  whose  offices  such  letters  have  emanated  had  an  under- 
standing or  agreement  whereby  business  was  to  be  declined 
unless  the  rates  published  by  the  bureau  or  expert  rater  were 
secured?  In  the  circumstances  mentioned  therefore,  it  is  wiser 
and  just  as  useful  to  confine  your  comments  on  rates  to  their 
adequacy  or  inadequacy.  No  law  can  forbid  your  saying  that  a 
rate  which  is  offered  is  an  inadequate  one.  You  are  furthermore 
quite  warranted  in  writing  in  some  such  way  as  this:  "Our  experi- 
ence and  investigations  lead  us  to  believe  that  this  risk  is  worth 
not  less  than  blank  per  cent,  and  if  it  is  not  possible  to  secure 
at  least  that  figure  we  prefer  to  decline  the  business." 

In  the  discussion  of  the  necessity  for  clearness  in  corre- 
spondence reference  was  made  to  the  fact  that  unless  a  letter 
was  clear  and  definite  it  might  contain  implications  committing 
the  company  in  the  eyes  of  the  receiver  to  something  beyond 
the  intention  of  the  writer.    It  should  also  be  borne  in  mind  that 


39 

each  letter  establishes  a  precedent.  We  must  be  careful,  there- 
fore, not  to  establish  precedents  which  will  later  be  embarrassing 
and  in  this  connection  it  is  to  be  borne  in  mind  that  in  our 
business  as  in  every  other  some  of  the  people  with  whom  we 
deal  are  disingenuous  —  tricksters,  if  you  will  —  and  that  such 
persons  are  more  likely  than  others  to  scrutinize  your  letters 
with  a  view  of  reading  into  them  something  beyond  and  even 
quite  contrary  to  your  intention. 

The  next  requirement  for  a  successful  correspondent  is 
that  he  should  be  courteous  at  all  times.  This  does  not  imply 
lack  of  firmness  but  does  require  that  attention  should  always 
be  paid  to  the  form  in  which  a  letter  is  couched,  no  matter  how 
strong  its  declarations  may  be.  Just  as  it  is  one  of  the  require- 
ments of  a  successful  adjuster  that  he  shall  adjust  losses  in  such 
a  way  as  to  pay  no  more  or  less  than  the  company's  incurred 
Hability  and  at  the  same  time  as  a  rule  maintain  harmonious 
relations  with  the  claimant,  so  also  the  successful  office  corre- 
spondent is  one  who'  will  maintain  the  policy  of  the  company 
with  its  patrons,  agents,  and  field  men  even  when  the  carrying 
out  of  that  policy  means  loss  of  income  or  other  hardship  to 
those  to  whom  his  letters  go  and  yet  will  retain  their  good-will 
and  respect.  If  you  will  get  yourselves  into  the  habit  of  keeping 
in  mind  the  thought  —  "How  is  this  letter  going  to  sound  to 
the  man  who  receives  it?"  —  you  will  be  more  apt  to  appreciate 
the  wisdom  of  giving  courteous  expression  to  your  thoughts 
and  requests.  The  requirements  of  courtesy  may  be  fully 
met  without  sacrificing  strength.  The  writer  has  seen  not 
a  few  letters  which  were  intended  to  be  courteous  but  which 
succeeded  only  in  being  apologetic.  The  companies  you  repre- 
sent are  entitled  to  the  information  which  your  letters  call  out 
and  have  a  perfect  right  to  demand  that  their  business  shall 
be  transacted  according  to  the  rules  by  which  they  have  elected 
to  be  guided  so  that  while  courtesy  is  necessary  it  must  not 
displace  more  important  considerations.  Courtesy  without 
firmness  is  even  more  objectionable  than  firmness  without 
courtesy. 

Many  letters  which  come  into  our  offices  are  foolish :  others 
are  so  poorly  expressed  as  to  be  hardly  understood:  still  others 
contain  requests  which  are  unreasonable  to  an  extent  that  sorely 
tries  our  patience  and  good  nature.  The  thing  to  remember 
is  that  corporations  like  those  which  we  serve  are  engaged 
in  the  business  of  furnishing  service  of  one  kind  or  another  to 
the  public  and  that  service  without  courtesy  is  likely  to  be  a 
very  poor  kind  of  service.  Now,  by  courtesy  I  mean  not  merely 
the  use  of  poHte  phrases,  necessary  though  they  be,  but  the 
expression  in  your  correspondence  of  a  courteous  attitude  of 
mind.  Unless  courtesy  has  a  real  lodgement  in  your  mind  and 
intentions,  it  will  be  very  difficult  to  put  it  properly  into  a  letter. 
Mere  lip  courtesy  has  been  much  overdone  in  so-called  business 


40 

correspondence  during  the  past  few  years.  There  are  throughout 
the  country  many  correspondence  schools  whose  advertisements 
lead  readers  to  believe  that  a  successful  business  man  can  be 
created  by  a  course  lasting  a  few  weeks  or  at  most  a  few  months 
and  that  such  matters  as  successful  handHng  of  correspondence 
are  merely  tricks  of  trade.  Such  is  not  the  case.  There  is  no 
royal  road  leading  quickly  and  easily  to  education  and  knowledge 
in  this  or  any  other  department  of  endeavor.  The  myriad  form 
letters,  stock  phrases,  and  particularly  the  over-enthusiaum 
and  the  unreal  and  assumed  energy  which  are  so  patent  in  much 
of  the  literature  sent  out  by  these  correspondence  schools  largely 
fail  of  the  effect  which  they  are  supposed  to  produce.  It  is 
perhaps  not  too  much  to  say  that  much  of  the  literature  of  these 
schools  becomes  decidedly  nauseating  and  wearisome  to  those 
to  whom  it  is  addressed.  Your  courtesy  must  be  inspired 
by  a  feeling  within  you,  by  an  appreciation  of  the  necessities 
and  equities  of  each  case  which  you  are' considering.  Courtesy 
by  formula  will  not  answer.  After  all  our  own  personality 
and  our  mental  attitude  will  show  themselves  in  our  letters 
despite  our  best  efforts.  Therefore,  at  the  risk  of  reiteration,  I 
ask  you  to  remember  that  the  spirit  of  service  must  be  back 
of  your  courteous  language  if  that  language  is  to  accomplish 
results  of  real  value. 

The  last  quahfication  listed  I  have  named,  "Form,  or  the 
proper  use  of  the  English  Language."  I  speak  of  this  as  though 
it  were  a  distinct  factor  in  the  general  subject  we  are  discussing 
but  of  course  it  will  be  apparent  upon  a  moment's  consideration 
that  one  cannot  be  clear,  discreet,  and  courteous  in  his  corre- 
spondence without  a  certain  command  of  the  tool  employed 
to  convey  his  thoughts,  namely:  the  English  language,  and  I 
have  already  dwelt  upon  the  necessity  for  an  accurate  under- 
standing of  the  meaning  of  words  as  preliminary  to  the  various 
qualities  which  we  have  been  discussing.  Whatever  may  be 
the  canons  of  personal  and  friendly  correspondence,  the  first 
rule  of  business  correspondence,  in  so  far  as  it  is  compatible 
with  the  other  considerations  which  we  have  mentioned,  is 
brevity.  Business  letters  are  written  and  read  by  busy  men. 
there  is,  therefore,  no  room  for  useless  surplusage.  When  enough 
has  been  said  to  make  your  meaning  clear,  it  is  time  to  end  the 
letter. 

Ordinarily  simplicity  in  form  and  language  is  almost  as 
important  as  brevity.  In  the  general  run  of  business  you  are ' 
not  called  upon  to  write  in  an  elegant  fashion.  Simplicity  of 
form  tends  toward  directness  and  clarity  of  expression  and  that, 
as  we  have  seen,  is  the  first  requisite  of  a  good  business  corre- 
spondent. Let  your  language  be  simple  but  combine  your 
simple  words  and  phrases  into  sentences  which  are  grammatically 
correct  and  properly  formed  and  arranged.  For  the  kind  of 
correspondence  which  we  have  been  considering  the  less  you 


41 

think  about  "style"  the  better.  Indeed,  if  you  are  careful  to 
be  clear,  accurate,  discreet,  and  courteous  in  your  letters  and 
at  the  same  time  are  well  enough  grounded  in  the  use  of  the 
English  language  so  that  your  letters  are  as  to  grammatical 
construction  correct,  your  "style"  will  take  care  of  itself. 

Thus  far  our  discussion  of  the  entire  subject  has  chiefly 
concerned  itself  with  that  preponderating  mass  of  business 
correspondence  which  goes  out  day  by  day  from  company 
offices,  conveying  instructions,  authorizations,  criticisms,  expla- 
nations, etc.  There  are  other  and  higher  functions  of  office 
correspondence,  however,  for  which  you  must  be  prepared 
as  you  rise  in  the  service  and  come  to  occupy  more  important 
positions.  You  will  then  be  called  upon  to  write  letters  which 
have  to  do  with  outlining  of  policies  of  your  company  or  with 
the  expansion  or  acquisition  of  business  on  a  large  scale,  the 
creation  of  good- will,  the  discussion  of  contracts,  and  various 
other  important  matters.  This  kind  of  correspondence  often 
calls  for  something  more  than  the  routine  correspondence  which 
we  have  been  for  the 'most  part  considering.  This  final  function 
of  business  letter  writing  needs  to  have  behind  it  the  power 
and  facility  to  convey  conviction,  to  persuade,  and  is  greatly 
assisted  by  the  introduction  of  a  pleasing  quality  into  your 
letters.  In  other  words,  this  final  function  of  letter- writing 
requires  that  what  is  known  as  a  good  style  be  cultivated. 

One  of  the  chief  dangers  to  be  avoided  by  him  who  seeks 
to  acquire  a  good  and  pleasing  style  of  writing  is  to  be  found 
in  the  bad  habit  of  constantly  using  the  same  words  and  phrases 
in  discussing  the  same  or  similar  matters.  Do  not  let  your 
style  become  so  monotonous  that  anyone  who  has  received  a 
few  letters  from  you  knows  exactly  what  you  are  going  to  say 
upon  any  given  subject.  These  constant  reiterations  and  this 
unvarying  lack  of  variety  in  letters  make  them  wearisome, 
fatigue  the  attention,  and  make  it  impossible  for  them  to  produce 
the  effect  desired.  The  best,  if  not  the  only,  means  of  avoiding 
this  fault  is  by  the  enlargement  of  your  vocabulary. 

There  seems  to  be  no  other  —  or  at  least  no  better  —  way 
of  acquiring  a  good  English  style,  including  an  enlarged  vocabu- 
lary, than  by  reading  and  studying  the  works  of  the  best  English 
authors.  In  a  great  majority  of  cases  the  man  who  can  write 
a  fine  letter  will  be  found  to  be  a  well-read  man,  not  merely 
a  reader  of  newspapers  and  magazines  but  a  reader  of  good 
books.  The  author  whom  we  have  already  quoted,  Robert 
Louis  Stevenson,  in  another  portion  of  his  writings  dwells  at 
great  length  upon  this  and  gives  an  account  of  his  own  endeavors 
to  acquire  a  good  style,  an  effort  in  which  he  was  supremely 
successful.  He  states  that  having  made  a  study  of  certain 
masters  of  good  English  he  would  endeavor  to  describe  an 
event  or  a  scene  in  the  exact  language  that  they  would  have 
employed    and    that    during    certain    periods    he     consciously 


42 

endeavored  to  make  all  his  writings  resemble  those  of  some 
particular  author  whose  work  he  was  studying  at  that  time. 
Such  a  process  is  hardly  to  be  recommended  for  our  purposes. 
Nevertheless,  the  study  of  good  literature  offers  the  best  method 
for  the  improving  not  only  of  one's  style,  which  we  are  just 
now  considering,  but  also  for  acquiring  the  correct  use  of 
English  words  and  the  power  to  express  one's  thoughts  clearly 
and  in  a  pleasing  manner. 

Someone  may  at  this  juncture  ask  what  books  or  what 
authors  are  to  be  recommended  to  be  read  with  this  end  in  view. 
Of  older  books  there  can  be  little  doubt  that  the  St.  James 
version  of  the  Bible  stands  preeminent  in  its  influence  upon 
the  literary  style  of  the  men  who  have  most  successfully  handled 
our  language.  Nowhere  else  is  there  to  be  found  purer  or  better 
English  than  in  that  version  of  the  Scriptures.  The  truth 
of  this  observation  is  well  illustrated  in  the  writings  of  Abraham 
Lincoln.  It  is  hardly  too  much  to  say  that  the  best  things 
he  wrote  or  said  from  a  literary  point  of  view  owe  their  beautiful 
and  classic  form  to  his  knowledge  and  appreciation  of  the  Bible 
as  a  literary  work.  The  works  of  Shakespeare  also  of  course 
have  had  an  enoromus  influence  upon  their  readers.  Those 
of  you  who  were  fortunate  enough  to  have  an  opportunity 
or  reading  many  of  the  letters  of  the  late  J.  D.  Browne,  President 
of  the  Connecticut  Insurance  Company,  will  not  have  failed 
to  note  the  influence  of  both  of  these  forces  upon  his  mind, 
thought,  and  language,  and  there  have  been  few  men  in  our 
business,  by  the  way,  who  could  write  finer  letters  than  those 
which  came  from  his  pen. 

If  I  were  asked  to  recommend  a  list  of  modern  writers,  the 
reading  of  whose  works  would  be  helpful  for  our  purposes,  I 
should  name  the  following.  The  list  is  by  no  means  exhaustive 
—  is  rather  very  incomplete  —  but  embraces  a  few  of  those 
whose  command  of  our  language  is  noteworthy. 

Thomas  Carlyle  Admiral  Mahan 

Joseph  Conrad  Robert  Louis  Stevenson 

John  Galsworthy  Elihu  Root 

Prof.  Huxley  H.  G.  Wells 

President  Wilson 
Each  of  these  in  his  way  is  a  master  of  English.  For  a  business 
man  it  is  questionable  whether  a  better  model  could  be  found 
than  the  English  employed  in  the  essays  of  Professor  Huxley, 
who  not  only  stated  his  convictions  with  great  clearness  and 
force  but  even  when  treating  of  abstruse  subjects  was  able 
to  make  use  of  such  a  charming  literary  style  as  to  doubly 
emphasize  the  effect  of  what  he  wrote.  AH  of  these  men  have 
the  faculty  of  occasionally  making  use  of  an  unusual  word 
which  arrests  the  attention  and  vivifies  and  particularizes 
the  meaning  of  the  phrase  or  sentence  wherein  it  appears. 


43 

These  observations,  for  the  most  part  of  an  elementary 
nature  and  necessarily  also  for  the  most  part  suggestive  rather 
than  definite,  it  is  hoped  will  nevertheless  convey  to  you  an 
idea  of  the  importance  of  this  general  subject.  It  would,  in  fact, 
be  hard  to  exaggerate  it  from  the  companies'  point  of  view  and 
it  is  scarcely  less  important  as  affecting  your  own  individual 
progress.  Many  an  intelligent  and  otherwise  successful  member 
of  an  office  force  has  been  held  down  to  the  lower  grades  of  work 
by  his  inability  to  acquire  a  mastery  of  the  art  of  correspondence. 
There  is  probably  not  a  head  office  in  this  city  that  does  not 
contain  more  than  one  example  of  this  kind.  Those  of  us  who 
are  called  upon  to  look  over  the  letters  of  others  are  often  filled 
with  a  sense  of  discouragement  at  their  inadequacy  and  their 
imperfections.  Furthermore,  it  makes  little  difference  what 
kind  of  work  you  are  now  doing.  Your  value  will  be  increased 
if  you  can  augment  your  ability  as  a  correspondent. 

I  sincerely  hope  that  the  few  remarks  I  have  made  to  you 
this  evening  will  cause  some  of  you  to  give  thought  to  this  matter 
and  that  the  results  may  be  manifest  in  the  greater  measure 
of  success  which  shall  hereafter  come  to  you. 


Processes  and   Hazards  of  JVletalworkers 

BY 

F.  MINOT  BLAKE 

Processes  and  Hazards  of  Metal  Workers. 

An  attempt  will  be  made  in  this  paper  to  give  a  brief 
description  of  the  principle  processes  and  hazards  in  the  metal 
working  class,  and  for  convenience  the  subject  will  be  considered 
in  three  main  divisions,  first  foundries  and  forge  shops. 
second  heavy  metal  workers  such  as  rolling  mills,  structural 
iron  workers,  machine  shops  and  third,  light  metal  workers, 
manufacturing  small  articles  including  .  jewelry,  with  some 
remarks  in  regard  to  hazards  common  to  all  divisions.  However, 
the  subject  is  so  broad,  that  a  sub-division  is  difficult,  because 
any  particular  property  under  consideration  might  contain 
all  the  hazards  of  the  entire  class. 

The  main  process  in  the  foundry  consists  of  converting 
the  metal  from  its  rough  form  into  a  molten  state,  then  pouring 
into  molds  and  allowing  it  to  again  solidify  by  setting  or  cooling. 
The  two  principle  materials  used  are  the  metal,  iron,  and  the 
alloy,  brass,  and  the  processes  used  are  similar  except  that  of 
reducing  the  material  to  a  molten  state.  The  processes  of  an 
iron  foundry  will  be  considered  first  and  include  manufacturing 
the  patterns  and  cores,  making  the  molds,  melting  the  iron, 
pouring  into  the  molds  and  finishing.  The  molds  are  formed 
of  sand,  which  encloses  the  patterns  and  cores  and  the  patterns 
are  then  removed,  leaving  the  spaces  in  the  sand,  into  which 
the  molten  metal  is  poured.  A  special  kind  of  sand  must  be 
used  so  as  to  give  as  smooth  a  finish  as  possible  to  the  casting 
and  also  to  be  porous  enough  to  allow  the  escape  of  the  gases 
generated  when  the  hot  metal  is  poured  into  the  mold.  For 
small  castings  the  sand  mold  is  made  in  a  flask,  which  is  a  wooden 
frame  in  two  or  three  parts,  so  arranged  that  they  can  be  sepa- 
rated and  the  pattern  removed,  then  placed  together  again 
ready  to  receive  the  molten  metal.  For  large  castings,  the  mold 
is  built  up  in  an  excavation  in  the  foundry  floor,  braced  and 
supported  by  fire  brick  and  finished  with  loam.  The  patterns 
are  usually  made  of  wood  and  the  process  of  manufacture  involves 
rather  light  hazards  of  the  woodworking  class,  there  being 
no  dry  kiln  hazard  and  no  important  finishing  hazard  although 
the  patterns  are  painted  or  shellacked.  The  principle  hazard 
in  this  process  is  the  care  of  the  refuse.     The  cores  are  made 


45 

of  sand  and  paste  formed  into  the  desired  shape  in  wooden 
frames,  called  core  boxes  and  then  baked  hard  in  the  core  ovens. 
The  only  hazard  here  is  the  ovens  and  care  should  be  taken  that 
they  are  properly  installed  and  clear  of  all  inflammable  material. 
The  ovens  are  heated  by  various  means,  hard  coal,  fuel  oil  or 
gas. 

The  main  and  most  important  process  in'  the  foundry 
will  now  be  considered,  that  of  melting  the  iron  and  it  is  done 
in  a  furnace  called  a  cupola,  which  is  a  high  vertical  cylinder 
made  of  boiler  iron,  lined  with  fire  brick.  A  common  size  is 
about  fifteen  feet  high  and  three  to  five  feet  internal  diameter 
and  the  bottom  is  about  four  feet  above  the  floor,  the  cupola 
being  supported  by  iron  legs.  Near  the  bottom  is  an  opening 
for  removing  the  molten  iron  and  also  several  other  openings 
called  tuyeres,  through  which  is  blown  air  under  forced  draft 
from  a  blower.  The  cupola  is  charged  with  kindling  wood 
at  the  bottom,  with  several  successive  layers  of  anthracite  coal 
or  coke  and  iron  in  the  form  of  pigs.  The  opening  for  removing 
the  molten  iron  is  plugged  with  clay,  the  kindling  ignited, 
the  air  blast  turned  on  and  the  burning  coal  or  coke  reduces 
the  pig  iron  to  a  molten  state,  and  it  is  drawn  from  the  cupola 
by  removing  the  clay  plug,  into  clay  pots  or  iron  pots  lined  with 
clay  and  taken  into  the  molding  room  and  poured  into  the 
molds.  The  cupola  hazard  is  a  furnace  hazard,  with  the  addi- 
tional hazard  due  to  more  or  less  molten  iron  that  may  be  spilled 
near  the  base  of  the  cupola,  and  there  should  be  no  combustible 
material  near  the  cupola  or  its  stack.  Because  of  the  method 
of  heating,  an  immense  number  of  sparks  are  thrown  out  of 
the  chimney  from  the  cupola,  so  there  should  be  no  combustible 
coverings  permitted  on  roofs  of  nearby  buildings  and  no  com- 
bustible yard  storage,  and  suitable  shields  should  be  installed 
at  the  top  of  the  stack. 

The  process  of  pouring  the  metal  does  not  involve  any 
particular  hazard,  although  there  is  the  danger  of  some  of  the 
metal  being  spilled  and  setting  fire  to  any  combustible  material, 
but  these  fires  are  of  little  consequence,  as  the  only  combustible 
material  present  is  the  wooden  flasks,  the  foundry  floor  being 
universally  of  earth  or  sand.  There  is  the  chance  of  the  mold 
being  too  damp,  so  that  when  the  molten  iron  is  poured,  a  large 
amount  of  steam  is  generated  and  the  casting  explodes,  scattering 
the  molten  metal,  but  this  is  a  rare  occurrence.  After  the 
castings  are  cool,  they  are  taken  from  the  sand  and  finished, 
this  process  being  merely  chipping  off  the  rough  places  with 
a  cold  chisel  or  grinding  off  the  rough  edges  on  emery  wheels, 
run  by  power,  with  no  particular  hazard.  Care  should  be  taken 
that  the  flasks  are  put  in  a  safe  place  after  the  castings  and 
sand  are  removed,  as  fires  have  started  from  hot  and  smoul- 
dering flasks. 


46 

As  before  stated,  the  processes  of  a  brass  foundry  are  similar 
to  an  iron  foundry,  excepting  in  the  melting.  Brass  is  melted 
in  black  lead  crucibles  in  a  furnace,  usually  heated  by  coal, 
the  process  involving  a  furnace  hazard.  There  is  the  further 
distinction  that  brass  castings  are  usually  so  much  smaller 
than  iron,  that  the  hazards  are  on  a  smaller  scale,  and  fre- 
quently a  brass  foundry  is  in  part  of  one  of  the  main  buildings, 
while  an  iron  foundry  is  always  in  a  building  devoted  solely 
to  that  purpose.  Particular  care  should  be  taken  if  the  brass 
foundry  is  in  the  main  building. 

The  latest  National  Fire  Protection  Association's  fire 
record  of  foundry  fires  shows  364  fires  with  known  causes,  with 
approximately  75%  from  special  hazard  causes,  which  is  a 
large  percentage  and  shows  the  class  to  be  hazardous.  Forty- 
two  per  cent,  of  the  special  hazard  fires  were  due  to  the  cupola, 
twenty-four  per  cent,  to  core  ovens  and  furnaces,  and  sixteen 
per  cent,  to  pouring,  and  although  the  figures  are  not  given, 
undoubtedly  the  fires  caused  by  pouring  were  of  minor  impor- 
tance, leaving  the  cupola,  core  oven  and  furnace  responsible 
for  most  of  the  foundry  fires.  The  hazard  is  so  evident  and  so 
easy  to  safeguard,  that  it  is  surprising  better  care  has  not  been 
taken  in  installing  these  furnaces. 

The  process  in  the  forge  shop  consists  of  heating  the  metal, 
usually  wrought  iron,  so  that  it  may  be  shaped  into  any  desired 
form,  either  by  large  steam  hammers  or  by  hand  hammers  on 
anvils.  For  making  large  forgings,  brick  furnaces  are  used  for 
heating  the  metal  and  care  should  be  taken  that  the  furnaces 
are  well  arranged,  including  proper  arrangement  of  flues.  For 
making  small  forgings,  the  small  familiar  iron  forges  are  used, 
with  iron  pans  on  which  coal  fires  are  built,  the  iron  to  be  heated 
being  placed  directly  in  the  fire;  forced  draft  is  used  by  means 
of  a  blower  and  a  system  of  galvanized  piping  connected  to 
all  the  forges.  Hoods  should  be  placed  over  the  forges,  all 
connected  by  another  system  of  piping  to  a  chimney  to  carry 
off  the  hot  gases,  etc.  The  forges  should  be  well  set  and  the 
flues  and  chimneys  properly  arranged,  the  flues  not  to  be  run 
in  places  where  inflammable  dust  could  collect  on  their  surface. 
The  floor  of  the  forge  shop  should  be  non-combustible,  either 
concrete  or  dirt. 

Preliminary  to  taking  up  the  heavy  metal  workers,  consid- 
eration will  be  given  to  the  manufacture  of  pig  iron  and  the- 
making  of  wrought  iron  and  steel.  The  blast  furnace  is  the 
universal  means  of  obtaining  pig  iron  from  iron  ore.  A  blast 
furnace  is  similar  to  a  foundry  cupola,  but  much  larger,  the 
charge  in  the  furnace  consisting  of  iron  ore,  limestone  and  fuel 
in  the  form  of  coke,  anthracite  coal,  charcoal  and  occasionally 
bituminous  coal,  and  the  charge  is  melted  down  in  a  similar 
way,  as  in  the  cupola,  excepting  the  air  blast  is  heated  by  passing 
the  air  through  a  series  of  brick  stoves,  done  to  economize  on 


47 

fuel  in  the  blast  furnace.  The  molten  iron  is  drawn  off  from 
the  blast  furnace  and  cast  in  rough  molds  in  the  form  of  pigs. 
Pig  iron  is  used  without  change  in  foundry  work  and  used  for 
the  manufacture  of  wrought  iron  and  steel,  the  distinction 
between  wrought  iron  and  steel  being  the  amount  of  carbon 
present,  wrought  iron  being  practically  free  of  carbon  and  of 
great  use  in  blacksmith  shops,  as  it  can  be  readily  forged. 

The  process  of  converting  pig  iron  into  wrought  iron  is 
known  as  "puddling"  and  is  done  in  a  brick  reverberatory  fur- 
nace, on  a  hearth  with  a  brick  arch  over  it  for  reflecting  the 
heat.  Either  gas  or  coal  fuel  is  used  and  the  pig  iron  melted 
and  the  oxygen  for  the  removal  of  the  carbon  and  impurities 
is  furnished  by  the  slags  and  oxides  of  iron  added.  When  the 
process  is  finished  the  iron  is  balled  up  by  hand  with  iron  tools 
and  run  through  rolls  into  the  form  of  bars. 

There  are  three  main  processes  of  making  steel,  the  Bessemer, 
Open  Hearth  and  Crucible  methods:  Bessemer  steel  being  used 
for  rails,  structural  iron,  agricultural  tools;  Open  Hearth 
steel  for  rails,  structural  iron,  springs,  shafts  and  armor  plates, 
and  Crucible  steel  for  high  grade  tools,  razors,  etc. 

In  the  Bessemer  process,  the  pig  iron  is  obtained  direct 
from  the  blast  furnace  in  a  molten  state  or  is  melted  down  in 
a  cupola.  The  molten  iron  is  then  poured  into  the  converter, 
which  is  an  iron  vessel  open  at  the  top  and  lined  with  some  form 
of  sandstone  and  air  blown  through  the  molten  iron,  oxidizing 
the  carbon,  converting  the  metal  into  wrought  iron  and  the 
required  amount  of  carbon  is  added  in  some  form  to  change 
the  molten  mass  into  steel,  which  is  poured  into  large  molds 
of  rough  shape,  forming  what  is  known  as  "ingots." 

The  Open  Hearth  process  is  done  in  furnaces  similar  to 
the  puddling  furnaces,  the  charge  being  pig  iron,  ore  and  scrap, 
but  the  charge  when  finished  is  drawn  off  through  tap  holes  and 
cast  into  "ingots." 

Crucible  steel  is  made  in  clay  or  graphite  crucibles,  placed 
in  a  furnace  and  resting  directly  on  a  coal  fire.  The  charge 
consisting  of  bar  iron  and  charcoal,  is  melted  down  and  poured 
into  small  molds. 

The  principle  hazard  of  all  these  steel  manufacturing  pro- 
cesses is  the  furnace  hazard  and  all  the  processes  should  be 
carried  on  in  the  open  or  in  non-combustible  buildings,  and 
this  is  usually  the  case  in  practice. 

The  principle  class  of  heavy  metal  workers  is  composed 
of  rolling  mills,  structural  iron  mills,  plate  mills,  etc.,  and  in 
connection  therewith  is  usually  found  more  or  less  of  the  steel 
manufacturing  processes.  The  main  process  of  rolling  the  metal 
out  into  desired  shapes  is  not  hazardous  and  consists  of  passing 
the  steel  ingots  heated  to  a  plastic  state  between  rolls  of  various 


48 

shapes,  then  sawing  the  product  into  the  desired  lengths.  The 
principle  hazard  is  in  connection  with  the  handling  of  the  hot 
metal  and  all  floors  should  be  of  non-combustible  construction. 

Some  mention  will  now  be  given  machine  shops,  but  this 
is  the  least  hazardous  of  all  the  metal  working  classes.  The 
processes  here  consist  in  working  the  castings,  rods,  plates, 
etc.,  into  the  desired  form,  by  means  of  power  machine  tools, 
such  as  lathes,  planers,  shapers,  drills,  etc.  The  machinery 
is  not  fast  running  and  the  process  of  cutting  the  metal  by 
edged  tools  presents  very  Httle  hazard.  There  is  a  mild  hazard 
in  some  types  of  automatic  machinery  due  to  the  fact  that  the 
cutting  is  done  in  the  presence  of  a  small  continuous  stream  of 
oil  and  an  undesirable  condition  is  liable  to  result,  that  is  the 
floor  may  become  oil  soaked  and  sometimes  sawdust  is  used 
to  absorb  the  excess  oil,  becaUvSe  in  spite  of  precautions  the 
surroundings  become  very  oily. 

The  light  metal  workers  will  now  be  taken  up,  this  class 
including  plants  making  jewelry,  metal  novelties,  lamps,  fix- 
tures, etc.,  and  the  hazards  here  are  much  greater  than  in  the 
machine  shop  class,  due  to  the  fact  that  the  machinery  is  run 
faster,  and  there  are  additional  hazards  due  to  soldering,  lac- 
quering, -japanning,  electro-plating,  buffing  and  polishing. 
Soldering  is  usually  done  by  means  of  a  small  gas  flame  in  direct 
contact  with  the  metal  and  there  is  generally  a  series  of  gas 
jets,  arranged  at  intervals  along  a  bench.  Either  city  or  gasoline 
gas  is  used  in  conjunction  with  air  blast,  fixed  iron  piping  being 
used  with  connections  made  to  the  burners  by  rubber  tubing. 
The  benches  should  be  of  metal  and  there  should  be  a  main 
valve  controUing  the  gas  supply  and  the  foreman  of  the  depart- 
ment should  be  instructed  to  see  that  this  valve  is  shut  at  the 
close  of  working  hours.  At  times  fires  and  explosions  have 
occurred  in  gas  soldering  systems  due  to  soldering  flames  being 
left  burning  and  main  gas  supply  not  being  shut  off  before 
blower  is  shut  down.  This  can  be  avoided  by  proper  supervi- 
sion of  gas  valves  and  installation  of  proper  wire  gauze  fire 
arresters. 

Lacquering  is  a  finishing  process,  lacquer  being  a  metal 
varnish,  composed  of  a  resin  or  some  pyroxyHn  product,  dissolved 
in  a  solvent  such  as  alcohol  or  benzine.  The  chief  hazard  in 
lacquers  is  due  to  the  fact  that  they  are  extremely  inflammable 
in  themselves,  also  give  off  inflammable  vapors  at  ordinary, 
temperatures  and  these  vapors  also  form  explosive  mixtures 
with  air.  Japanning  and  enamelling  are  similar  processes  to 
lacquering,  although  in  these  cases  the  resulting  coating  is 
opaque  whereas  in  lacquering  the  coating  is  transparent.  Japans 
and  enamels  are  composed  of  asphaltum  or  some  sort  of  oil 
paint  mixed  with  linseed  oil  or  turpentine,  thinned  with  benzine 
or  some  dangerous  inflammable  oil.  The  process  of  lacquering, 
japanning  or  enamelling  is  done  usually  by  dipping  the  articles 


49 

to  be  finished  in  a  tank  containing  the  solution  and  then  placing 
the  articles  in  a  dry  box  or  oven  to  complete  the  process,  forming 
a  hard  glazed  surface.  The  hazard  of  these  ovens  is  important, 
especially  as  the  gases  given  out  are  usually  composed  of  the 
lighter  petroleum  compounds,  producing  an  explosion  hazard. 
The  ovens  should  be  well  constructed  and  arranged  and  care 
should  be  taken  that  proper  ventilation  is  secured,  with  a 
flue  to  give  a  slight  draft.  Steam  or  electricity  are  without 
question  the  safest  methods  of  heating  ovens,  but  unfortunately 
open  gas  jets  are  frequently  used,  especially  in  small  ovens  and 
probably  the  reason  more  fires  have  not  occured,  where  this 
condition  exists  is  due  to  the  fact,  that  only  a  small  amount 
of  vapor  is  present,  and  because  a  high  grade  material  is  being 
used,  without  much  benzine. 

Lacquering,  japanning  and  enamelling  can  only  be  classed 
as  hazardous  processes  and  if  at  all  extensive  should  be  done- 
in  a  detached  building,  arranged  for  the  purpose.  If  not  exten- 
sive, the  process  may  be  done  in  one  of  the  main  buildings, 
but  in  this  case  should  be  in  a  room  well  ventilated  and  arranged, 
also  separated  from  the  main  floor  by  a  good  fire  stop  or  cut  off. 

The  process  of  electro  plating  is  done  in  vats  containing 
a  liquid  of  the  desired  composition  including  a  metal  in  solution. 
The  articles  to  be  plated  are  placed  in  the  liquid  and  an  electric 
current  passed  through  the  solution,  decomposing  it  and  de- 
positing the  metal  on  the  articles  being  plated.  There  is  no 
hazard  of  importance  involved. 

The  process  of  polishing  and  buffing  is  a  finishing  process 
and  consists  of  holding  the  article  to  be  finished  against  a 
rapidly  revolving  wheel,  the  buffing  surface  being  built  up  of 
layers  of  cotton  cloth,  various  substances  being  used  on  the 
wheel  such  as  beeswax  and  oil,  etc.  Considerable  lint  is  thrown 
oflf,  so  the  surroundings  are  liable  to  be  dirty  and  the  hazard 
is  increased  due  to  the  oil  present.  Metal  hoods  should  be 
used  over  the  wheels  and  connected  to  a  good  suction  blower 
system,  and  the  dust  and  lint  blown  to  a  small  detached  dust 
house,  or  if  it  is  desired  to  reclaim  the  metal  dust  in  the  lint, 
the  blower  should  discharge  into  some  form  of  water  tank. 

Having  considered  the  different  classes  of  metal  workers, 
a  few  remarks  will  be  given  to  processes  and  hazards  more  or 
less  common  to  all  and  the  first  subject  in  this  group  is  that  of 
oils.  The  first  group  of  oils  to  be  considered  are  the  mineral 
oils,  obtained  by  the  fractional  distillation  of  crude  petroleum, 
and  the  ones  usually  found  in  metal  workers  are  the  lighter 
products,  benzine,  naptha,  gasoline  and  the  heavier  products 
or  lubricating  oils.  Benzine,  naptha  and  gasoline  are  used  for 
cleaning,  thinning  varnishes,  japans,  etc.,  and  their  hazards 
are  too  well  known  to  enumerate  in  this  paper.  The  heavier 
products  or  lubricating  oils  are  of  a  high  fire  test  and  therefore 


50 

non-hazardous,  further  their  composition  is  not  changed  on 
exposure  to  the  air  and  therefore  they  are  not  subject  to  spon- 
taneous combustion.  Pure  mineral  oils  are  excellent  lubricants. 
The  next  group  of  oils  is  that  of  the  animal  and  vegetable  oils, 
such  as  lard  oil,  tallow  oil,  cod  liver  oil,  cotton  seed,  linseed  and 
olive  oil.  They  all  are  different  from  the  mineral  oils,  and  are 
not  stable,  undergoing  chemical  change  when  exposed  to  the 
air,  with  some  development  of  heat,  which  if  confined  and  if 
inflammable  material  is  present,  results  in  fire.  They  are  not 
volatile,  so  cannot  be  considered  in  the  same  class  as  the  lighter 
petroleum  products.  This  group  of  oils  are  found  to  a  limited 
extent  in  their  pure  state  in  metal  workers.  Frequently  trade 
lubricating  oils  are  used,  consisting  of  a  mixture  of  the  expensive 
mineral  oils  and  some  of  the  animal  or  vegetable  oils  and  this 
results  in  an  increase  of  hazard.  Large  quantities  of  oil  should 
never  be  kept  in  the  main  buildings,  but  in  a  detached  oil  house, 
built  for  the  purpose.  There  is  no  spontaneous  combustion 
hazard  if  the  pure  and  expensive  mineral  oils  are  used,  but  this 
hazard  exists  if  animal  or  vegetable  oils  are  used  either  in  their 
pure  or  in  a  trade  mixed  oil. 

In  connection  with  the  oil  hazard,  should  be  considered 
that  of  oily  waste.  Large  quantities  of  cotton  waste  are  used 
for  cleaning  machinery  and  this  waste  soon  becomes  dirty  and 
oily  and  frequently  fires  have  started  due  to  spontaneous  com- 
bustion in  oily  waste.  On  this  account  an  ample  supply  of 
standard  waste  cans  should  be  placed  at  convenient  places  around 
the  factory.  Proper  care  should  also  be  taken  of  machine  shop 
sweepings,  as  they  contain  oily  material  of  various  kinds,  such 
as  waste,  iron  filings  and  chips,  sawdust,  etc.,  and  are  particu- 
larly liable  to  spontaneous  combustion.  Even  piles  of  damp 
oily  iron  chips  have  been  known  to  heat  up  by  spontaneous 
combustion,  when  the  heat  is  confined  and  combustible  material 
present. 

Oil  is  used  in  some  cases  for  oil  tempering  and  hardening; 
the  process  consisting  of  heating  the  metal  in  some  sort  of  a 
furnace,  then  dropping  it  while  hot  in  an  oil  bath.  This  process 
is  not  particularly  hazardous,  because  the  oils  used  have  a 
high  flash  point  and  there  is  little  danger  of  setting  fire  to  the 
oil  by  the  hot  metal. 

Various  acids  are  used  in  metal  workers,  for  cleaning  and 
for  electro  plating,  but  the  only  one  of  any  hazard  is  concen-< 
trated  nitric  acid,  which  if  brought  in  contact  with  fibrous 
material,  results  in  so  violent  a  chemical  action,  that  sufficient 
heat  may  be  developed  to  start  a  fire.  This  hazard  is  more 
pronounced  due  to  the  fact,  that  the  acid  is  shipped  in  glass 
carboys,  packed  in  sawdust  and  straw. 

Crude  oil  or  petroleum  is  frequently  used  for  heating  forges 
and  furnaces,  the  oil  being  conveyed  to  the  burners  by  various 
means,  atomized  at  the  burners,  by  air  or  by  steam,  and  burned, 


51 

the  jet  of  atomized  oil  being  usually  blown  horizontally  into 
the  fire  chamber.  This  process  even  if  well  arranged  means 
a  distinct  increase  of  hazard  and  it  is  of  vital  importance  that 
the  supply  tank  be  properly  located  and  every  precaution  taken 
to  prevent  an  uncontrolled  flow  of  oil  into  the  building.  Some 
of  the  advantages  of  an  oil  fire  over  coal  is  that  the  fire  is  con- 
tinuous and  constant,  is  ready  immediately,  no  time  being  lost 
in  replenishing  and  raking  the  fire  and  waiting  for  it  to  come 
up,  as  is  the  case  when  coal  is  used.  A  description  will  be  given 
of  a  well-known  system,  that  installed  by  the  Gilbert  and  Barker 
Manufacturing  Company.  In  this  system,  the  oil  is  pumped 
to  a  well  designed  burner  under  pressure,  atomized  by  an  air 
blast,  the  oil  entering  the  furnace  in  the  form  of  a  spray.  The 
apparatus  consists  of  a  rotary  air  compressor,  and  oil  pump, 
storage  tank,  the  burners  and  system  of  piping.  The  main 
supply  of  oil  is  put  in  the  storage  tank,  which  is  buried  at  a 
convenient  distance  outside  the  building,  underground,  and 
both  the  tank  and  oil  pump  are  located  below  the  level  of  the 
lowest  burner,  so  that  it  is  impossible  for  the  oil  to  flow  into 
the  building  by  gravity.  The  air  compressor  and  the  oil  pump 
are  connected  by  a  chain,  so  if  the  air  compressor  stops,  the 
flow  of  oil  also  stops,  making  it  impossible  to  feed  unatomized 
oil  into  the  furnaces.  The  oil  pump  delivers  the  oil  into  the 
distributing  pipes  and  any  surplus,  through  a  suitable  relief 
valve,  back  into  the  storage  tank,  thus  insuring  a  constant 
supply  of  oil  under  uniform  pressure,  regardless  of  the  number 
of  burners  in  use. 

The  National  Board  of  Fire  Underwriters  have  published 
rules  for  the  installation  of  oil  burning  apparatus  and  these 
should  be  carefully  followed,  some  of  the  important  features 
being  location  and  arrangement  of  the  supply  tank,  the  rules 
varying  as  to  capacity  of  tank  and  conditions  at  the  individual 
plant,  but  no  installation  is  approved,  where  the  oil  can  flow 
into  the  building  by  gravity.  Further,  the  rules  provide  for 
a  well  installed  pump  and  piping  system  to  prevent  leaks, 
and  also  arranged  so  that  all  oil  will  flow  back  to  the  supply 
tank  when  system  is  shut  down. 

Other  than  approved  oil  burning  systems  are  found  in  prac- 
tice which  means  an  increase  of  hazard,  especially  if  any  large 
amount  of  oil  is  inside  the  building,  which  is  the  case  in  systems 
where  the  oil  is  pumped  from  an  outside  storage  tank  to  an 
elevated  supply  tank  inside  the  building  and  fed  to  the  burners 
by  gravity. 

In  spite  of  the  increased  hazard,  oil  systems  have  not  been 
the  cause  of  many  serious  fires,  due  probably  to  the  constant 
presence  of  employees,  where  the  system  is  in  use  and  where 
leaks  have  occurred,  they  have  been  small  and  immediately 
discovered. 


52 

Mention  has  already  been  made  of  gas  soldering  systems, 
found  principally  in  jewelry  factories  and  frequently  gasoline 
gas  is  made  at  the  plant  and  used,  especially  if  the  cost  of  public 
gas  is  high.  If  gasoline  gas  is  used,  care  should  be  seen  that 
the  installation  is  according  to  the  rules  of  the  National  Board 
of  Fire  Underwriters,  and  the  least  hazard  is  obtained  with 
those  systems,  which  do  not  introduce  liquid  gasoline  into  the 
building  and  this  is  the  type  of  system  usually  found  in  metal 
workers.  In  this  system,  the  carburetor  or  storage  tank  filled 
with  gasoline  is  located  about  thirty  feet  from  the  building 
and  buried  underground.  Inside  the  building,  usually  in  the 
basement,  is  located  an  air  pump,  usually  operated  by  a  system 
of  weights  and  a  mixer,  all  connected  by  a  system  of  piping. 
In  operation,  air  is  pumped  to  the  carburetor,  over  the  surface 
of  the  gasoline  and  the  gasoline  gas  obtained  returned  to  the 
mixer  in  the  building,  where  it  is  mixed  with  air  in  the  correct 
proportions  and  delivered  to  the  burners.  The  mixer  delivers 
a  uniform  quantity  of  gas  in  the  proportion  of  about  85% 
air  to  15%  gasoline  vapor.  Such  a  system,  if  well  installed, 
does  not  mean  any  particular  increase  in  hazard. 

A  process  at  times  found  in  metal  workers,  is  the  manu- 
facture of  producer  gas,  which  is  used  for  heating  furnaces  or 
for  combustion  in  gas  engines  as  power.  One  well  known  con- 
cern, the  Otto  Gas  Engine  Company,  manufactures  a  suction'  gas 
producer  for  use  in  connection  with  their  gas  engines.  This 
suction  producer  is  a  simple  apparatus  to  put  the  heat  of 
anthracite  coal  in  such  form,  that  it  can  be  used  for  driving 
a  gas  engine.  The  coal  is  burned  in  a  smothered  fire  and  a  gas 
formed,  containing  fully  nine-tenths  of  the  heat  in  the  coal, 
but  the  gas  as  it  leaves  the  producer  is  hot  and  dirty;  some 
heat  is  lost  in  cooling  and  scrubbing,  but  finally  80%  of  the  heat 
in  the  coal  is  available  for  use  in  the  gas  engine.  The  plant 
consists  of  the  producer,  the  scrubber  and  gas  receiver  all  con- 
nected by  piping. 

The  producer  contains  the  fire,  the  coal  being  fed  in  at 
the  top  and  consists  of  a  heavy  upright  steel  cylinder,  lined  with 
fire  brick,  with  a  grate  at  the  bottom  and  a  water  pan  called 
an  evaporater  or  moistener  at  the  top.  Air  is  drawn  in  at  the 
top,  over  the  surface  of  the  water  in  the  evaporator,  is  moistened 
and  the  air  and  water  vapor,  pass  down  to  the  bottom  of  the 
producer,  then  up  through  the  coal  fire,  where  it  combines  with 
the  red  hot  carbon  to  form  the  gas,  which  is  piped  from  the  top 
of  the  producer  to  a  three-way  smoke  stack  cock,  which  can 
be  set  to  let  the  gas  pass  up  the  stack  or  to  the  bottom  of  the 
scrubber,  which  is  merely  a  steel  upright  cylinder,  partly  filled 
with  coke  and  constantly  sprinkled  with  w^ater,  piped  in  at 
the  top.  The  hot  gas  in  passing  up  through  the  scrubber  is 
forced  by  the  coke  to  follow  a  very  crooked  passage,  bringing 
it  in  close  contact  with  the  water,  which  is  flowing  down  through 


53 

the  scrubber.  The  water  carries  the  ash  and  other  heavy 
impurities  in  the  gas  down  to  a  settHng  basin,  at  the  bottom 
of  the  scrubber.  The  gas  is  cool  and  clean  as  it  approaches 
the  top  of  the  scrubber,  is  then  piped  to  the  bottom  of  the  gas 
receiver  and  in  its  slow  passage  through  the  receiver  deposits 
any  excessive  moisture  it  may  contain;  the  gas  is  then  piped 
directly  to  the  gas  engine  ready  for  use. 

The  entire  apparatus  is  connected  together  and  when  in 
full  operation,  the  pressure  inside  the  apparatus  is  less  than 
that  of  the  atmosphere,  preventing  any  leakage  of  gas  to  the 
outside,  the  air  being  drawn  into  the  producer  by  the  suction 
of  the  gas  engine.  However,  a  blower  is  required  for  starting 
the  apparatus  and  for  reviving  the  fire  in  the  producer  after 
a  shut  down. 

We  have  no  record  of  any  serious  fires  or  explosions  in  such 
gas  producer  installations,  but  the  fact  must  not  be  overlooked 
that  an  inflammable  and  explosive  gas  is  being  generated, 
which  is  a  semi -water  gas,  containing  25%  carbon  monoxide 
and  16%  hydrogen.  Care,  therefore,  must  be  taken  that  the 
apparatus  is  well  installed  and  located  in  a  well  ventilated  room. 
Under  the  rules  of  the  National  Board  of  Fire  Underwriters, 
subject  to  the  approval  of  the  inspection  department  having 
jurisdiction,  suction  gas  producers  may  be  installed  in  certain 
places  of  the  main  buildings. 

Pressure  gas  producer  systems  are  more  hazardous  than 
the  suction  gas  type,  as  the  pressure  inside  the  producer  is 
greater  than  that  of  the  atmosphere  and  these  systems  must 
be  located  in  a  building  erected  for  the  purpose. 

A  process  frequently  found  in  metal  workers  and  which 
is'  being  employed  in  a  number  of  different  ways  is  that  of  oxy- 
acetylene  welding  which  is  used  for  various  kinds  of  welds  and 
in  repairing  broken  or  cracked  parts.  In  welding  with  this 
process,  oxygen  and  acetylene  gases  are  combined  in  a  blowpipe 
to  produce  a  flame  of  intense  heat,  6,300°  F.,  and  by  means 
of  suitable  valves  in  the  blowpipe,  the  flame  can  be  easily  con- 
trolled in  a  small  or  a  large  volume.  The  welding  is  done  by 
applying  the  flame  to  the  edges  of  the  metals  to  be  joined  and 
additional  material  of  the  same  kind  as  that  being  worked  upon, 
may  be  added  to  fill  in  or  build  up  the  section.  This  additional 
material  is  in  the  form  of  a  rod  or  wire,  which  is  so  held  by  the 
operator,  that  the  end  of  the  rod  or  wire  is  at  the  juncture  of 
the  parts  being  welded  together. 

This  process  is  also  extensively  used  for  cutting  metals 
such  as  steel  plates,  structural  steel,  etc.,  and  in  these  cases 
a  jet  of  oxygen  is  directed  upon  a  previously  heated  part  of  the 
metal,  igniting  the  metal,  which  burns  with  great  rapidity  and' 
a  narrow  clean  cut  is  the  result.  The  action  is  so  localized  and 
so  rapid,  that  the  heat  does  not  spread  and  the  metal  on  either 
side  of  the  cut  is  uninjured. 


54 

Acetylene  gas,  the  fuel  used  in  this  process  may  be  obtained 
from  a  gas  plant  on  the  premises  by  means  of  the  usual  calcium 
carbide  and  water  generator  or  it  may  be  obtained  in  steel 
tanks,  charged  on  other  premises.  These  steel  tanks  are  filled 
with  asbestos  saturated  with  acetone  in  which  the  acetylene 
is  dissolved  and  compressed  to  a  high  pressure  and  in  this  way 
a  large  volume  of  gas  may  be  obtained  in  a  small  space.  These 
tanks  are  of  convenient  size  and  easily  portable.  The  other 
gas  used,  oxygen,  is  occasionally  maunfactured  on  the  premises 
of  large  plants,  but  is  usually  bought  in  steel  cylinders  from 
concerns  making  a  specialty  of  its  manufacture.  The  arrange- 
ment of  the  welding  apparatus  depends  on  the  extent  to  which 
the  process  is  used.  In  large  installations,  the  welding  and 
cutting  is  done  in  a  room  arranged  for  the  purpose  and  in  these 
cases  the  acetylene  is  usually  made  on  the  premises  and  the 
generator  should  always  be  located  in  a  detached  building 
and  installed  in  full  accordance  with  the  rules  of  the  National 
Board  of  Fire  Underwriters.  The  acetylene  is  piped  into  the 
part  of  the  plant  where  the  blowpipes  are  used  with  suitable 
back  pressure  valves  installed.  The  oxygen  tanks  are  arranged 
in  the  same  room  with  the  blow  pipes. 

The  second  type  used  is  a  portable  apparatus  consisting 
of  an  acetylene  generator  and  oxygen  tanks  all  mounted  on  one 
base,  the  entire  outfit  being  on  wheels. 

The  third  type  is  the  smallest  and  is  made  up  of  an  acety- 
lene tank  and  an  oxygen  tank  mounted  on  the  same  base  and 
readily  portable. 

The  fire  record  of  these  systems  has  been  good  in  spite  of 
the  hazardous  properties  of  the  gases  used.  Acetylene  is  one  of 
the  most  inflammable  and  explosive  gases  known  and  forms 
an  explosive  mixture  with  air  in  almost  all  proportions.  Oxygen, 
while  not  combustible,  is  dangerous  as  it  is  an  active  supporter 
of  combustion,  that  is,  it  renders  other  substances  combustible 
and  makes  gases  explosive.  However,  if  the  entire  apparatus 
is  well  installed  and  maintained  no  great  increase  of  hazard 
exists,  in  fact  the  only  case  of  accident  of  which  we  have  record 
occurred  in  an  industrial  school,  where  the  operator  altered 
the  apparatus,  hoping  to  obtain  better  results  of  welding.  An 
explosion  occurred  with  considerable  local  damage,  the  death 
of  the  operator  and  serious  injury  to  his  assistant. 

In  closing,  will  be  quoted  some  statistics  of  the  National 
Fire  Protection  Association  in  regard  to  fire  record  of  metal 
workers  with  foundries  omitted.  The  figures  were  published 
in  1908.  Total  number  of  fires  601,  divided  into  305  due  to 
common  causes  or  51%  and  296  due  to  special  hazards  or  49%, 
which  is  about  the  normal  proportion  for  low  hazard  manu- 
facturing risks.  The  most  important  special  hazards  were  as 
follows:  japan  ovens  and  japanning  57  fires,  furnaces  46,  buffing 
and  polishing  29,  forges  22. 


55 

The  most  important  hazard  in  the  entire  class  is  the  furnace 
hazard,  including  that  of  forging,  and  next  to  that  is  the  finish- 
ing hazard ;  if  these  two  groups  of  hazards  are  further  safe- 
guarded improvement  will  be  made  in  the  record  of  the  class 
which  already  is  an  excellent  one  from  a  fire  insurance  stand- 
point. 


Automatic  Sj)rinkler  Protection 

BY 

F.  C.  MOORE 

Automatic  Sprinki.er  Protection 

There  is  no  sub-division  of  fire  protection  which  has 
attained  the  importance  to  the  property  owner  of  automatic 
sprinkler  protection  and  to  none  has  so  much  practical  recog- 
nition been  accorded  by  the  fire  insurance  companies  by  reduc- 
tion in  fire  insurance  rate.  The  merit  of  the  idea  having  been 
recognized  early,  the  subject  became  the  goal  of  many  experi- 
menters and  investigators,  until  the  details  of  installation 
and  use  of  the  system  have  been  quite  well  worked  out  and  there 
is  a  mass  of  reports  on  the  minutiae  with  little  or  nothing  dealing 
with  the  subject  as  a  whole  in  a  logically  progressive  way 
which  would  give  a  fair  understanding  to  a  layman  and  it  is 
the  aim  of  these  articles  to  do  this  as  well  as  possible  in  the 
limited  space  available.  The  principal  interest  of  most  people 
is  in  present  day  methods  and  that  will  be  our  guide,  with  only 
brief  reference  to  the  historical. 

An  automatic  sprinkler  is  a  peculiar  water  valve  which 
opens  when  the  solder  fuses  which  holds  the  valve  closed.  It 
melts  at  a  certain  definite  temperature,  ordinarily  about  160° 
F.,  by  the  heat  of  the  surrounding  air  which  a  fire  quickly 
raises  to  the  necessary  temperature.  These  sprinklers  are 
screwed  into  fittings  in  water  pipes  placed  throughout  a  building 
at  the  ceiling  in  an  arrangement  intended  to  provide  for  the 
distribution  of  a  shower  from  the  sprinklers  so  that  any  fire 
in  the  building  will  be  extinguished  or  controlled  by  the  opera- 
tion of  the  sprinklers.  The  installation  of  sprinklers  is  governed 
by  a  set  of  rules,  in  special  cases  supplemented  by  the  judg- 
ment of  an  insurance  inspector,  and  it  is  so  difficult  to  become 
intimately  acquainted  with  all  the  conditions  that  it  is  inad- 
visable to  entrust  the  work  of  sprinkler  installation  to  any 
but  him  who  possesses  experience  in  it. 

The  subject  of  automatic  sprinkler  protection  includes 
not  only  the  results  of  that  protection  but  also  the  considera- 
tion of  the  efficiency  of  the  apparatus  and  devices  and  their 
limitations,  the  installation  under  varying  conditions,  the  water 
supplies,  auxiliary  devices  associated  with  sprinkler  systems, 
and  a  host  of  indirect  relations  which  can  not  be  treated  here. 


57 

The  idea  of  making  the  heat  of  a  fire  automatically  operate 
some  kind  of  fire  extinguisher  is  known  to  be  nearly  two  hundred 
years  old.  In  1809,  Sir  William  Congreve  patented  a  system 
of  perforated  outlets,  the  water  supply  controlled  by  combustible 
cords  and  three  years  later  substituted  a  cement  fusible  at  110° 
for  the  cords.    Nothing  practical  came  of  it. 

Major  A.  Stewart  Harrison,  another  Englishman,  invented 
a  system  in  1864,  including  a  sprinkler  head  using  solder,  but 
without  practical  success. 

The  real  beginning  of  the  idea  that  has  developed  into 
automatic  sprinkler  protection  was  when  perforated  pipes 
were  put  into  parts  of  cotton  mills  in  Lowell,  Massachusetts, 
about  1852,  the  method  having  been  used  in  England.  From 
this  beginning  the  development  was  continuous  though  slow 
until  Parmelee's  sprinkler  more  than  twenty  years  later  gave 
the  impetus  never  since  lacking. 

This  perforated  pipe  system  consisted  of  pipes  fastened 
to  the  ceiling  at  regular  intervals,  drilled  with  two  rows  of 
1/10"  holes  each  row  to  one  side  of  the  top  of  the  pipe,  the  holes 
16  or  18  inches  apart  in  the  row  and  staggered  so  that  there 
was  a  hole  in  the  pipe  every  8  or  9  inches.  These  pipes  were 
connected  to  the  supply  main  in  sections,  each  controlled  by 
a  gate  valve.  When  a  fire  was  discovered,  somebody  opened 
the  valve  and  water  issued  all  over  the  section.  The  pipes 
were  proportioned  and  graduated  according  to  the  area  of  the 
holes  supplied. 

At  first  it  was  put  into  the  picker  rooms  only,  the  most 
hazardous  part  of  a  cotton  mill,  then  into  carding  and  spinning 
rooms  also,  and  in  1859,  they  were  required  in  the  Lowell  mills 
in  these  parts  and  in  other  places  where  special  protection  was 
deemed  needful.  Comparatively  few  mills  were  completely 
equipped. 

The  system  was  improved.  They  bored  more  holes,  varied 
their  location  and  size,  inserted  a  non-rusting  plate  bearing 
the  orifice  and  finally  substituted  for  perforated  pipes  solid 
ones  with  spray  nozzles  or  roses  at  regular  intervals,  each  pro- 
tected from  dirt  and  vapors  by  a  loose  fitting  tin  cap  that  was 
blown  off  by  the  water. 

The  holes  were  stopped  up  with  dust,  rust,  sediment,  or 
filled  with  paint.  Every  little  while  a  valve  would  be  opened 
by  accident  or  with  malice.  When  the  fire  came  they  didn't 
always  guess  the  section  right;  always  they  turned  on  the 
water  over  a  much  larger  area  than  was  really  needful  at  first 
and  this  taxed  the  water  supply  too  severely.  The  system  was 
fundamentally  objectionable  because  it  was  not  automatic. 
All  these  defects  came  to  be  realized,  hence,  ultimately,  Parmelee. 
Yet  in  the  thirty  years  of  their  active  life  these  systems  put 
out  many  fires  and  many  times  failed  to  do  so. 


58 

The  first  practical  success  with  sprinklers  was  in  this 
country.  Henry  S.  Parmelee  of  New  Haven,  patented  an  auto- 
matic sprinkler  August  11,  1874,  which  had  a  slotted  revolv- 
ing cap  to  cut  up  the  stream  into  fine  jets  and  this  was  covered 
by  a  cap  held  to  the  base  of  the  sprinkler  with  solder  melting 
at  a  low  temperature.  About  200,000  were  installed  before 
anything  better  was  invented  and  they  put  out  many  fires  and 
awakened  general  interest.  This  sprinkler  was  slow  in  action 
because  the  solder  joint  was  on  the  body  of  the  sprinkler  where 
the  metal  was  in  contact  with  the  water  inside  so  that  the  cooling 
effect  of  the  water  had  to  be  overcome  by  the  heat  before  the 
solder  would  fuse.  The  sprinkler  was  modified  to  diminish 
this  defect.  This  particular  objection  appears  to  be  the  reason 
for  the  invention  of  the  present  type  in  which  the  parts  on  which 
the  solder  is  placed  are  held  away  from  the  body  of  the  sprinkler 
and  have  such  small  area  of  contact  with  it  that  there  is  no 
appreciable  cooling  effect  from  the  water  or  the  mass  of  the 
sprinkler  casting.  This  is  well  illustrated  by  the  fact  that 
a  sprinkler  fusing  at  155°  F.  remained  several  hours  without 
fusing  in  a  fitting  filled  with  water  maintained  above  200°  F. 

The  first  of  the  modem  automatic  sprinklers  was  invented 
in  1882,  by  Frederick  Grinnell,  and  though  this  particular 
pattern  is  not  now  being  installed,  it  is  in  principle  like  the 
current  types  having  the  valve  held  by  a  lever  with  fusible 
joint  out  of  contact  with  the  body  of  the  sprinkler,  a  serrated 
disk  to  cut  up  the  stream  and  an  orifice  about  3^  inch  in  diameter. 

Other  sprinklers  of  the  same  principle  followed  close  upon 
this  one.  Not  one  of  this  early  period  has  stood  the  test  of 
usage  without  material  improvement  in  design.  Most  of  them 
have  long  been  out  of  use.  Only  one  of  the  old  names  is  rep- 
resented among  the  modems.  Altogether  more  than  450  auto- 
matic sprinklers  have  been  patented  but  only  thirteen  are  now 
on  the  approved  list.  A  mortality  greater  than  that  of  modern 
warfare.  No  captive  of  the  Indians  ever  ran  such  a  long  or 
deadly  gauntlet  as  these  sprinklers,  which  raced  down  the  long 
lane  of  years  lined  both  sides  with  eager  underwriters,  earnest 
engineers,  inspectors  armed  with  theories,  facts,  wild  guesses, 
all  taking  a  hack  at  the  fast  thinning  file  of  sprinklers  the  leaders 
of  which  may  be  supposed  to  have  plucked  up  courage  as  they 
ran  unharmed,  only  to  stagger  with  dismay  at  the  sight  of  the 
Underwriters'  Laboratories  on  the  goal  end  of  the  line  armed 
with  every  damnable  weapon  the  others  had  overlooked.  All 
hail  the  survivors  I 

An  acceptable  automatic  sprinkler  must  be  strong,  tight 
under  high  and  variable  water  pressures,  able  to  distribute  a 
definite  amount  of  water  in  a  uniform  shower  over  a  satisfactory 
area,  manufactured  to  standard  gauge,  set  up  to  uniform  stress 
and  be  incapable  of  having  its  adjustment  changed  after  com- 


59 

pletion,  able  to  withstand  corrosion  and  coating  tests  without 
disabhng,  uniform  in  fusing,  to  name  some  of  the  necessary 
quaHfications. 

At  this  time  a  sprinkler  which  is  submitted  for  approval 
must  possess  these  qualities : 

Twelve  gallons  per  minute  discharge  at  5  pounds  pressure. 

No  leakage  at  300  pounds  water  pressure. 

No  leakage  under  variation  from  0  to  300  pounds  water 
pressure  repeatedly  applied. 

Fusing  point  of  small  variation. 

Complete,  snappy  opening  under  no  pressure.     Open  one. 

When  4  to  6  inches  from  smooth  ceiling  must  under  5  pounds 
pressure  wet  the  ceiling  over  an  area  3  to  4  feet  in  diameter 
and  throw  90%  of  the  water  into  an  area  10  feet  square  directly 
beneath  and  75%  under  50  pounds  pressure  with  uniform 
distribution. 

The  water  must  be  cut  up  into  fine  drops  and  the  parts 
must  not  materially , interfere  with  distribution. 

Sprinklers  under  examination  are  tested  a  great  many  times 
and  for  long  periods  of  time. 

The  leakage  test  usually  shows  seepage  around  the  orifice 
at  600  to  1860,  average  1,009,  well  above  the  minimum  require- 
ment of  300  pounds. 

For  fusibility  they  are  tested  in  an  oven  of  definite  design, 
under  a  5  pound  pressure,  the  temperature  increasing  a  definite 
amount  each  minute.  Under  this  test  a  sprinkler  of  160°  F. 
fusing  point  opened  in  53^  minutes  at  256°  on  an  average. 
The  test  conditions  are  always  the  same,  otherwise  the  results 
could  not  be  fairly  compared,  which  is  true  of  any  tests.  The 
present  conditions  of  test  are  those  handed  down  from  the  early 
days  of  testing  and  which  cannot  be  changed  without  losing 
the  benefit  of  comparison  with  what  has  been  done  which  is 
probably  why  they  persist.  The  oven  test  is  slow,  about  six 
sprinklers  an  hour  being  the  rate. 

They  are  also  immersed  in  hot  fiuid,  water  for  ordinary 
heads,  lard  for  those  fusing  at  higher  temperatures,  and  are 
submitted  to  the  intermittent  action  of  a  flame. 

To  determine  the  influence  upon  their  operation  of  corro- 
sion or  coating  they  are  tested  after  subjection  for  weeks  to 
the  action  of  the  fumes  of  different  strong  acids,  chlorine, 
ammonia,  sulphur,  and  after  coating  with  such  materials  as 
oil  paint,  whitewash,  shellac  and  asphaltum. 

The  sprinklers  are  subjected  to  blows  and  the  soldered 
links  to  long  continued  stresses.  The  factory  methods  of  their 
manufacture  are  carefully  examined,  especially  with  a  view  to 
uniformity,  and  the  makers  are  now  using  templates  and  limit 
gauges  that  permit  only  minute  and  unimportant  variations. 
Since  1901,  the  testing  of  sprinklers  for  approval  has  been  done 
by  the  Underwriters'  Laboratories,  Chicago. 


(30 

Without  discussing  the  details  of  automatic  sprinkler 
design,  a  general  explanation  of  the  functions  of  the  different 
parts  of  a  sprinkler  will  make  plainer  the  limitations  of  the 
device  and  how  improper  handling  or  location  affect  it.  Selecting 
an  example  at  random,  the  illustration  shows  the  principal 
parts  to  be  a  stout  frame  with  ^  inch  thread  so  it  can  be  screwed 
into  the  pipe  fitting  and  having  a  finished  outlet  for  the  water, 
a  distributor  or  deflector  plate  fastened  to  the  frame  opposite 
the  outlet,  a  valve  disc  of  a  material  which  cannot  be  stuck 
to  the  seat  by  corrosion,  levers  bearing  on  the  valve  and  the 
frame  and  always  under  stress  tending  to  make  them  fly  out 
but  held  fast  by  some  form  of  a  pin  or  link  kept  in  place  by  a 
low  temperature  solder.  A  fire  occurs,  the  heated  air  melts 
the  solder,  the  levers  fly  out,  and  the  water  issues. 

Most  of  the  metal  parts  of  a  sprinkler  are  of  bronze,  a 
strong  yet  not  easily  corroded  metal.  The  solder  and  the  parts 
it  unites  are  the  most  vital  parts  and  the  most  sensitive  to  adverse 
influences.  Unless  the  solder  fuses  the  sprinkler  will  not  open 
and  is  then  useless. 

This  solder  is  an  alloy  and  the  mixture  used  for  ordinary 
conditions  is  in  the  proportion  of  bismuth  4,  lead  2,  cadmium  1, 
and  tin  1,  which  melts  at  about  155°  to  165°  F.,  and  this  is  the 
lowest  fusing  point  obtainable  without  sacrificing  other  more 
desirable  qualities.  It  has  proven  low  enough.  Twenty-five 
years'  use  on  sprinklers  yet  in  service  has  not  developed  any 
important  criticism  of  this  solder  or  shown  any  undoubted 
reason  that  it  will  not  hold  its  strength  and  fuse  properly. 

There  are  places  where  sprinklers  must  be  placed  in  which 
the  temperature  rises  higher  than  ordinary,  such  as  in  dry  kilns 
and  over  furnaces.  For  use  in  such  places  sprinklers  are  made 
with  solder  fusing  at  212°,  286°  and  360°  F.  To  enable  the 
different  degrees  of  high  test  heads  to  be  distinguished  at  a 
glance  it  has  for  some  years  been  required  that  the  frames 
shall  be  painted  a  distinctive  color  for  each  different  fusing  point, 
white  for  212°,  blue  for  286°  and  red  for  360°,  but  there  are  so 
many  high  test  heads  in  use  that  were  made  before  this  scheme 
was  evolved  that  the  absence  of  color  is  not  conclusive  evidence 
that  the  head  is  of  low  fusing  point  unless  it  is  certain  the  risk 
was  equipped  after  the  adoption  of  the  color  scheme.  It  is 
the  practice  to  use  a  sprinkler  fusing  at  a  temperature  not 
less  than  60°  higher  than  the  highest  temperature  reached  at 
the  place  where  the  sprinkler  is  to  be  placed,  but  with  that  limi- 
tation to  use  the  sprinkler  with  the  lowest  fusing  point  permissi- 
ble. It  requires  a  longer  time  to  fuse  a  sprinkler  the  higher 
its  melting  point,  hence  fire  has  longer  to  burn  before  water 
reaches  it,  and  therefore  none  of  the  high  test  heads,  as  they  are 
often  called,  is  used  except  when  absolutely  necessary,  and  when 


61 

the  occupancy  of  a  place  changes  so  that  they  are  no  longer 
needed,  they  should  be  removed  and  low  test  heads  should 
be  substituted. 

To  show  the  difference  in  time  required  to  fuse  sprinklers 
of  the  different  melting  points,  the  following  quotations  are 
made  from  standard  oven  tests : 

Degree  of  Sprinkler  Distinguishing  Appearance 
Fused  at  Time  Elapsed. 


165°  F. 

Not  colored. 

255.9°  F. 

5'  341^" 

212°  F. 

Frame  white. 

285.8°  F. 

8'  37" 

286°  F. 

Frame  blue.   . 

369.2°  F. 

16'  56" 

360°  F. 

Frame  red. 

505.2°  F. 

30'  30" 

The  actual  time  elapsing  from  the  start  of  a  fire  in  a  risk 
to  the  opening  of  the  first  sprinkler  varies  with  the  conditions 
of  the  fire  and  the  place.  Some  fires  quickly  grow,  others  smolder; 
some  places  are  low  -ceiled  and  the  air  is  still,  but  others  are 
lofty  and  draughty.  Under  ordinary  conditions,  the  elapsed 
time  averages  about  a  minute.  That  it  is  short  enough  to  give 
a  high  degree  of  efficiency  in  extinguishment  the  record  proves 
beyond  question. 

The  amount  of  water  from  a  sprinkler  per  minute  is  approxi- 
mately : 

15  gallons  at    5  pounds  pressure, 
19  gallons  at  10  pounds  pressure, 
24  gallons  at  15  pounds  pressure, 
31  gallons  at  25  pounds  pressure, 
40  gallons  at  50  pounds  pressure, 
though  it  varies  slightly  in  different  sprinklers.     Assume  that 
75%  of  the  water  discharged  from  a  sprinkler  at  50  pounds 
falls  within  an  area  ten  feet  square,  which  equals  an  average 
depth  per  minute  of  .48  inch.     Compare  that  with  the  most 
violent  rainstorm  ever  recorded  in  the  government  station  at 
Hartford,  averaging  .076  inch  per  minute.     In  other  words,  the 
sprinkler  would  throw  6.3  times  as  much  water.     To  put  it 
another  way,   a  sprinkler  at   5  pounds  pressure  would  throw 
more  than  twice  as  much  water  as  the  record  rainstorm.     This 
makes  it  more  apparent  why  no  fire  can  grow  under  a  sprinkler 
in  working  order  unless  it  is  sheltered  by  some  such  umbrella 
as  a  bench,  table,  pile  of  boxes  or  barrels,  or  some  similar  obstruc- 
tion that  keeps  the  sprinkler  rain  from  the  fire. 

The  sprinklers  are  screwed  into  fittings  in  pipes  which  are 
run  throughout  the  building  so  that  every  nook  and  corner 
may  be  protected  and  every  fire  extinguished  •  in  its  incipiency, 
which  is  a  vital  principle.  Formerly  this  inside  pipe  was  wrought 
iron  but  now  it  is  practically  all  of  soft  steel  and  this  material 
is  now  said  to  be  of  equal  or  greater  resistance  to  ordinary  corro- 
sion than  wrought  iron,  though  experts  differ.     A  life  insurance 


62 

company  owning  a  large  building  in  which  the  sprinkler  pipes 
were  to  be  concealed  is  said  to  have  ordered  wrought  iron  piping, 
for  the  sake  of  durability.  The  pipe  system  is  connected  to 
its  water  supplies  and  the  system  is  ready  for  use.  All  this 
is  a  matter  of  time  and  cooperation  among  several  organizations . 

In  the  earlier  days  of  sprinklers  the  interest  of  the  property 
owner  in  this  form  of  protection  was  awakened  by  the  earnest 
personal  solicitation  of  the  traveHng  representatives  of  the 
sprinkler  companies.  The  installation  rules  had  not  been  worked 
out  by  the  insurance  companies  and  the  price  was  influenced 
by  variations  in  the  manner  of  installing.  It  was  almost  im- 
possible for  a  buyer  to  tell  whether  the  different  bids  were  on 
the  same  basis  or  not.  He  could  be  reasonably  sure  they  were 
not.  It  was  hard  to  say  one  way  was  good  and  another  was 
bad  because  nobody  knew  positively.  Generally  speaking 
there  was  no  preliminary  approval  of  detailed  plans  and  there 
was  sharp  practice  in  sprinkler  work.  Under  these  conditions 
the  public  did  not  take  the  interest  in  sprinklers  which  their 
intrinsic  merit  warranted. 

Soon  the  different  insurance  bodies  formulated  rules, 
varying  more  or  less  with  each.  The  natural  result  was  the 
movement  for  uniformity  which,  though  not  solely  actuated 
by  the  needs  of  sprinkler  systems,  was  principally  due  to  sprink- 
lers, and  culminated  in  the  formation  of  The  National  Fire 
Protection  Association  in  1896,  an  organization  to  improve 
the  methods  of  fire  prevention  and  protection.  One  of  the 
first  things  they  did  was  to  draw  up  standard  rules  for  the 
installation  of  automatic  sprinkler  systems  which  were  gradually 
perfected  until  of  late  years  these  have  changed  only  as  new 
problems  demand  and  comparatively  few  of  those.  These  rules 
furnished  a  uniform  basis  which  at  once  raised  the  standard 
of  the  sprinkler  business,  protected  the  property  owner,  increased 
the  efficiency  of  sprinkler  systems  and  gave  a  great  impetus 
to  the  business  of  installing  them.  Today  with  the  economy 
of  modem  industrial  management  and  the  dissemination  of 
information  by  trades  associations,  no  factory  of  important 
size,  say  of  $75,000  or  more  in  value,  and  many  smaller  is  built 
without  serious  consideration  of  the  saving  in  fixed  charges 
to  be  obtained  by  sprinkler  protection  as  a  necessity  of  modern 
competition,  to  say  nothing  of  the  protection  to  the  industry, 
and  the  same  is  true  of  mercantile  enterprises,  though  in  less 
degree.  Henry  Ford  has  recently  made  a  condition  that  any 
plant  having  a  contract  to  supply  his  company  must  be  equipped 
with  sprinklers  to  protect  him  against  delay  and  loss  from 
interruption  of  their  production.  This  subject  is  also  kept 
before  the  public  by  the  distribution  of  well  written  advertising 
pamphlets  and  by  extensive  use  of  the  popular  magazines 
on  the  part  of  the  sprinkler  companies. 


63 

The  property  owner  makes  up  his  mind  he  wants  a  sprinkler 
system.  His  first  step  is  to  inquire  about  it  of  his  fire  insurance 
agent.  If  that  agent  is  wise  he  gives  him  all  the  information 
he  can  because  there  is  a  competing  agent  waiting  the  chance 
to  do  it  who  will  make  it  the  means  of  getting  the  business  and 
all  the  incidental  business,  too.  If  an  owner  asks  for  infor- 
mation he  is  entitled  to  have  it  and  if  the  agent  does  not  possess 
it  he  can  get  it  by  consulting  some  one  of  his  companies  which 
is  equipped  to  furnish  it. 

The  agent  will  obtain  for  his  customer  the  services  of  an 
expert  in  the  employ  of  some  one  of  his  companies  if  he  desires 
to  enjoy  the  advantage  of  a  discussion  from  broad  experience 
of  all  the  points  to  be  considered  in  connection  with  the  par- 
ticular risk,  which  gives  the  assured  a  full  understanding  of 
the  problem  before  he  commits  himself  to  any  part  of  its  exe- 
cution, oftentimes  of  much  value.  This  expert  can  furnish  a 
general  plan  for  the  fire  mains  and  appurtenances  and  a  list 
of  suggestions  in  connection  therewith  which  will  serve  as 
a  sufficient  guide  to  any  contractor.  The  plan  and  suggestions 
would  be  submitted  for  approval  to  the  rating  organization 
having  jurisdiction,  a  step  absolutely  necessary  for  the  protec- 
tion of  the  assured  in  order  that  he  may  not  spend  money  for 
improvements  that  were  not  approved  and  therefore  did  not 
receive  the  'fullest  possible  reduction  in  rate.  The  company 
expert,  having  fully  familiarized  himself  with  all  the  facts, 
is  in  a  better  position  to  explain  the  matter  to  the  rater  than 
the  owner  himself  and,  furthermore,  knows  the  practices  and 
precedents  of  the  rating  organization  and  can  therefore  save 
annoyance  to  both  parties  as  well  as  unnecessary  expense  without 
sacrificing  efficiency,  or  the  agent  may  call  directly  upon  the 
rating  organization  for  plan  and  requirements. 

Having  an  approved  plan  and  requirements  the  owner 
sends  copies  to  the  sprinkler  contracting  companies  he  desires 
to  bid  and  each  of  these  which  wishes  to  compete  will  send  a 
contracting  agent  to  examine  the  risk  and  secure  detailed  in- 
formation for  making  a  contract  price  and  submits  its  terms. 
After  the  owner  has  reduced  the  different  bids  to  a  common 
basis  for  comparison,  not  always  an  easy  matter  without  expert 
advice,  he  awards  the  contract  and  the  successful  bidder  then 
makes  a  working  plan  of  the  entire  system  showing  the  location 
of  every  sprinkler,  pipe  sizes,  lengths,  and  the  details  of  water 
supply,  and  submits  it  to  the  rating  organization  for  approval 
before  any  work  is  begun.  From  the  information  on  the  plan 
practically  all  the  pipe  is  cut  and  sent  to  the  risk  ready  to  be 
put  up.  At  least  this  is  the  practice  of  the  larger  concerns 
doing  this  work.  This  greatly  shortens  the  time  of  installation 
as  compared  with  the  old  way  of  cutting  all  the  pipe  on  the  job 
besides  being  more  economical. 


64 

Several  weeks  usually  elapse  between  the  signing  of  the 
contract  and  the  arrival  of  the  workmen  and  it  is  seldom  that 
an  ordinary  system  is  completed  in  less  than  three  weeks,  and 
from  that  upward,  dependent  on  conditions. 

The  work  finished  it  is  or  should  be  inspected  and  tested 
by  the  rating  organization  and  is  usually  inspected  by  at  least 
one  inspection  bureau  also.  These  tests  try  the  capacity  of 
the  water  supplies  and  apply  not  less  than  150  pounds  water 
pressure  for  two  hours  to  the  mains  and  the  sprinkler  system 
by  the  application  of  a  hand  pump  if  no  handier  way  exists, 
but  where  a  fire  pump  is  connected  this  is  used  for  the  purpose. 
If  the  system  is  tight  it  is  considered  satisfactory  so  far  as 
strength  is  concerned.  It  is  further  necessary  to  examine  the 
system  throughout  to  be  sure  the  sprinklers  and  other  apparatus 
called  for  have  been  provided  in  the  proper  number,  location 
and  of  the  proper  type.  If  all  is  correct  the  system  is  approved 
and  the  contractor  is  enabled  to  collect  the  balance  due  on  his 
contract,  usually  one-third,  the  previous  payments  being  as 
a  rule  one-third  when  the  work  is  begun  on  the  premises  and 
one-third  when  the  water  is  turned  on. 

These  systems  had  to  overcome  the  prejudice  of  people 
who  feared  the  piping  would  mar  the  appearance  of  an  orna- 
mental building  but  there  is  little  objection  on  that  score  now. 
The  piping  is  not  noticed  by  the  ordinary  person  as  it  is  painted 
as  near  as  possible  to  the  color  of  its  background  in  such  loca- 
tions. In  fireproof  buildings,  when  desired,  the  piping  is 
embedded  in  the  floor  arches  or  run  in  the  space  behind  sus- 
pended ceilings,  and  only  the  sprinkler  heads  show.  Some 
ceilings  have  been  designed  with  little  rosettes  in  regular  rows 
and  the  sprinklers  project  through  these  ornaments  so  unob- 
trusively that  there  have  been  cases  where  insurance  inspectors 
have  reported  that  such  rooms  were  not  equipped. 

Besides  all  sorts  of  buildings,  vessels  have  been  equipped, 
completely  in  some  of  the  Sound  and  Great  Lakes  steamers 
and  only  in  certain  portions  of  the  transatlantic  Imperator. 
The  finest  department  stores  as  well  as  the  roughest  factories, 
hotels,  schoolhouses,  car  barns,  all  are  commonly  considered 
as  suitable  subjects  for  equipment,  and  there-  is  hardly  any 
type  of  building  into  which  equipments  cannot  be  put,  though 
there  are  some  kinds  where  their  efficiency  is  quite  reduced 
on  account  of  the  occupancy. 

Owing  to  faulty  workmanship  by  local  plumbers  and  pipers 
of  factories  who  were  not  skilled  in  sprinkler  work,  endangering 
efficiency  and  requiring  expensive  changes  after  the  sprinkler 
systems  were  supposed  to  have  been  finished,  with  great  annoy- 
ance both  to  owners  and  insurance  authorities  there  grew  up  a 
strong  feeling  of  opposition  to  the  sale  of  sprinklers  for  use  by  such 
people  which  was  shared  and  fostered  by  the  established  sprinkler 
companies    not    altogether    disinterestedly.      It    culminated    in 


65 

the  passage  of  a  resolution  in  1903,  by  the  National  Fire  Pro- 
tection Association  expressing  the  opinion  that  automatic 
sprinklers  should  be  installed  by  the  recognized  automatic 
sprinkler  companies  and  discouraging  installation  by  others. 
The  principal  sprinkler  companies  did  then  refuse  to  sell  sprink- 
lers for  installation  by  others  so  far  as  possible  and  this  un- 
doubtedly reduced  the  troubles  at  which  the  measure  was 
aimed  but  so  far  as  it  prevented  competent  workmen  from 
obtaining  sprinklers  it  was  inequitable  and  today  there  are 
approved  sprinklers  which  are  sold  for  installation  by  others 
under  a  licensing  arrangement  intended  to  insure  the  selection 
of  skilled  pipers.  The  writer  has  seen  no  evidence  of  the  general 
existence  of  bad  workmanship  by  reason  of  this  plan,  which 
has  been  operative  about  two  years,  but  its  success  depends 
on  close  watch  by  the  licensers. 

In  connection  with  sprinkler  installation  there  is  always 
carpentry  to  make  holes  for  piping  through  floors  and  partitions, 
trenching  for  the  mains,  mason  work  in  piercing  foundations 
and  other  walls,  besides  cartage.  These  can  be  included  in  the 
sprinkler  contract  but  it  is  practically  always  more  economical 
for  the  owner  to  do  these  things,  because  he  can  often  get 
labor  cheaper  and  the  sprinkler  contractor  who  may  be  unfamiliar 
with  local  conditions  is  naturally  apt  to  make  his  estimate 
provide  unnecessarily  amply  for  unforeseen  emergencies. 

Before  sprinklers  are  installed  it  is  economy  to  consider 
whether  any  changes  in  the  arrangement  of  the  building  are 
planned  for  the  immediate  future,  for  it  is  a  waste  of  money  to 
change  partition  arrangement,  for  instance,  immediately  after 
completion  of  the  equipment,  as  it  is  bound  to  mean  changes 
in  sprinkler  piping  as  extra  work  with  all  that  implies.  A  little 
foresight  would  have  arranged  the  sprinklers  to  provide  in 
advance  for  that  condition.  In  buildings  that  have  been  in 
use  before  equipping,  there  is  apt  to  be  preliminary  work  to 
be  done  to  prepare  for  the  system,  such  as  repairing  breaks 
in  plastering  or  sheathing  flooring  over  well  holes,  removing 
useless  platforms  or  shelving  thus  saving  the  cost  of  sprinklers 
beneath.  As  a  noteworthy  instance  of  oversight  we  recently 
found  a  new  warehouse,  which  it  had  been  intended  to  equip 
even  before  the  plans  were  drawn  but  in  which  the  height  from 
floor  to  ceiling  was  such  as  to  permit  room  for  two  tiers  of 
cases  without  any  space  above,  but  as  24"  clear  space  below 
sprinklers  is  required  by  the  sprinkler  rules  for  proper  distribu- 
tion of  water,  they  could  use  the  warehouse  for  only  one  tier 
of  cases  and  had  to  build  another  warehouse  solely  by  reason 
of  this  error  in  planning. 

By  the  rules  sprinklers  must  be  upright,  that  is  above  the 
pipes,  except  where  circumstances  render  a  pendent  position 
necessary.  In  early  years  they  were  pendent,  but  it  became 
obvious  that  the  water  which  could  not  drain  out  of  the  neck 


66 

of  such  sprinklers  would  freeze  and  burst  the  head.  The  first 
step  was  to  make  heads  on  dry  systems  upright  because  it  was 
pretty  sure  to  be  cold  enough  to  freeze  in  some  part  of  a  build- 
ing where  a  dry  system  was  necessary.  Pendent  heads  persisted 
in  wet  systems  even  after  this,  but  occasionally  a  building 
with  a  wet  system  in  it,  therefore  a  heated  building,  would  be 
vacant  over  winter  and  unheated,  and  in  the  spring  they  would 
find  most  of  the  heads  frozen  open  if  they  had  not  been  thought- 
ful enough  to  unscrew  each  head  to  drain  it,  which  is  a  great 
bother.  Furthermore,  sediment  gathers  in  a  pendent  head  more 
readily  and  also  in  this  position  they  were  more  apt  to  be  struck 
through  carelessness.  Therefore,  upright  heads  were  made 
the  rule. 

The  deflector  is  to  be  3"  to  10"  below  the  ceiling  or  bottom 
of  joists.  An  intermediate  distance  gives  the  best  results,  but 
as  pipes  must  be  pitched  to  drain,  the  distance  from  the  ceiling 
must  vary.  The  heads  on  the  opposite  ends  of  a  60  foot  line 
of  pipe  will  be  3  inches  different  in  level,  the  usual  slant  of  pipe 
being  3^  inch  in  10  feet.  In  old  times  it  was  a  common  fault 
to  find  sprinklers  on  the  end  of  lines  crowded  up  between  two 
joists  so  that  the  distribution  of  water  from  them  was  all  but 
cut  off,  greatly  to  the  loss  of  efficiency,  but  now  there  is  little 
trouble  of  this  sort,  because  methods  of  obtaining  a  slight  uniform 
slant  are  exact  and  pipe  hangers  are  more  readily  adjustable. 

The  necessity  for  equipping  every  part  of  a  building  has 
already  been  mentioned.  In  fact,  if  there  are  any  spaces  where 
fire  can  be  sheltered  out  of  reach  of  water  from  sprinklers  that 
may  mean  a  greatly  increased  loss,  or  perhaps  such  a  mass  of 
combustible  materials  that  bad  results  from  sprinklers  are  to 
be  expected,  perhaps  even  total  losses  may  happen,  therefor 
risks  with  these  conditions  are  the  least  desirable  of*  sprinkled 
risks. 

Time  will  not  permit  detailed  reference  to  the  rules  for 
sprinkler  installation  but  a  general  reference  to  them  is  necessary. 

Experience  has  determined  that  a  spacing  of  about  10  feet 
between  heads  each  way  on  a  smooth  ceiling  is  right,  but  there 
is  some  elasticity  permitted  to  provide  for  less  usual  framing 
of  floor  timbers.  Of  late  years  considerable  floor  framing  has 
been  of  beams  4  to  6  feet  apart  with  spans  from  post  to  post 
correspondingly  greater  than  formerly.  This  has  often  resulted 
in  an  increase  in  the  number  of  sprinklers  over  the  framing  in 
regular  bays  10  feet  wide  and  not  infrequently  this  additional 
expense  for  sprinklers  by  reason  of  peculiar  framing  can  be 
obviated  by  planning  an  equally  satisfactory  framing  of  a  spacing 
more  economical  in  sprinklers. 

Under  joisted  ceilings  the  sprinklers  are  spaced  8  feet 
apart  in  the  direction  across  joists  and  10  feet  with  joists  and 
sprinklers  on  adjacent  lines  are  not  opposite  but  are  staggered 
or  alternated  so  as  to  cover  the  spaces  between  the  joists  better, 


67 

so  that  a  fire  safely  sheltered  in  a  channel  between  joists  midway 
between  two  sprinklers  on  a  line  would  be  almost  directly  over 
the  sprinkler  on  the  line  adjacent. 

The  determining  point  about  spacing  was  to  permit  the  heads 
to  be  as  far  apart  as  possible  and  control  the  fire  on  the  ceiling. 
Under  the  permitted  spacing  the  ceiling  is  not  completely  covered 
with  water  by  any  means,  but  sufficiently  so  to  be  safe. 

There  is  one  point  not  brought  out  by  any  rule  or  mention, 
which  is  that  any  beam  or  framing  member  that  is  carrying  a 
heavy  load  such  as  a  heavy  press  or  safe  must  have  sprinklers 
placed  so  it  will  be  protected  without  question,  even  though 
the  rules  for  spacing  might  not  require  them.  If  fire  could  weaken 
such  a  timber  so  that  such  a  heavy  machine  fell,  vital  injury 
to  the  sprinkler  might  very  likely  result  and  the  entire  sprinkler 
system  be  at  once  put  out  of  service  with  consequent  destruc- 
tion of  the  building.  That  beams  may  so  burn  for  lack  of  sprink- 
ler protection  has  been  proven. 

The  sizes  of  piping  have  been  increased  several  times, 
principally  to  decrease  the  number  of  sprinklers  fed  by  the 
smaller  pipes  from  ^"  to  23^2"  i^  size.  This  meant  cutting  down 
friction  loss  at  the  early  stages  of  a  fire,  the  important  time, 
and  increasing  the  efficiency  of  the  water  supply.  It  is  not 
often  that  the  capacity  of  the  larger  sized  pipes  is  heavily  taxed. 
The  ^"  pipe  has  always  been,  and  is  now,  the  smallest  pipe 
used.  Officially  it  was  permitted  to  supply  but  one  head,  but 
y^ars  ago  they  used  it  for  two.  The  1"  pipe  at  first  fed  three, 
now  only  two;  the  l}/i"  pipe  six,  now  three;  IJ^",  ten,  now  but 
five;  2",  eighteen,  now  ten;  23^^",  twenty-eight,  now  twenty; 
3",, forty-eight,  now  thirty-six.  Co-incident  with  this  increasing 
of  pipe  sizes  there  was  an  increase  in  the  thoroughness  with 
which  a  building  was  equipped  so  that  the  efficiency  of  a  sprink- 
ler system  has  been  doubly  safeguarded.  A  further  detail 
of  value  in  preventing  undue  friction  loss  is  the  reaming  smooth 
of  pipes  after  cutting,  removing  the  rough  edge  left  by  the 
cutting  tool  on  the  inside  edge  of  the  pipe. 

Bad  Use  of  White  Lead. 

The  object  of  the  design  of  pipe  sizes  is  to  make  sure  that 
every  sprinkler  likely  to  operate  will  have  a  discharge  equal 
to  the  minimum  acceptable  under  the  specifications,  when 
the  maximum  number  is  operating. 

The  entire  value  of  a  sprinkler  system  depends  on  having 
the  piping  system  remain  in  place  on  the  ceiling,  which  is  so 
obvious  that  the  thought  of  its  falling  down  may  seem  strange, 
but  this  has  happened  and  the  screws  used  to  hold  the  pipe 
hangers  must  be  not  only  heavy  enough  and  so  inserted  as  to 
hold  under  ordinary  conditions  but  also  under  ordinary  expo- 
sure to  a  fire.     If  a  fire  attacks  a  building  from  outside  or,  what 


68 

is  similar,  from  some  sheltered  place  inside,  it  may  heat  the 
hanger  screws  so  hot  that  the  wood  is  charred  so  that  they 
pull  out  and  allow  the  pipe  to  drop.  The  whole  system  of 
piping  over  a  considerable  area  has  come  down  more  than  once 
in  just  this  way.  The  natural  question  is,  how  can  it  get  so 
hot  without  opening  the  sprinklers  and  cooling  the  screws 
with  water.  You  will  recall  that  water  is  not  thrown  very  far 
on  the  ceiling  and  it  may  not  reach  them.  Furthermore,  under 
the  conditions  assumed,  an  abnormally  large  number  of  sprinklers 
will  be  opened  and  therefore  the  discharge  from  each  will  be 
reduced.  This  subject  is  given  due  consideration  by  competent 
contractors  today  and  is  the  subject  of  a  rule  which,  however, 
does  not  cover  all  phases  of  the  question. 

The  present  rules  require  the  supply  main  or  riser  for  a 
sprinkler  system  to  be  located  centrally,  to  reduce  friction  and 
provide  more  uniform  distribution  of  the  water  and  its  size  is 
determined  by  the  largest  number  of  sprinklers  it  feeds  on  any  one 
floor.  The  consideration  is  that  so  far  as  any  ordinary  needs 
of  water  are  concerned  it  will  only  be  necessary  to  consider 
sprinklers  on  one  floor  because  a  fire  is  usually  extinguished 
in  the  story  where  it  originates. 

All  the  water  supplies  are  required  to  be  connected  at  the 
base  of  the  riser,  with  special  exceptions.  This  is  to  get  the 
control  of  the  supplies  at  the  bottom  of  the  building  where  one 
valve  can  serve  for  all.  Then  in  case  of  a  break  or  at  the  close 
of  a  fire,  the  supply  can  be  easily  and  quickly  turned  off.  For- 
merly the  systems  often  had  the  supply  from  the  yard  main 
coming  in  at  the  bottom,  that  from  the  tank  on  the  top  floor, 
sometimes  two  of  them.  Consequently  when  the  water  was 
to  be  shut  off,  two  or  more  valves  at  opposite  extremes  of  the 
building  had  to  be  shut,  there  was  delay,  frequently  no  ready 
means  of  reaching  the  tank  valve,  and  even  it  was  forgotten 
in  the  confusion  to  close  one  valve. 

To  join  together  so  many  pipes  a  great  many  fittings  are 
necessary,  that  is,  cast  iron  hollow  pieces  of  the  necessary  different 
shapes  threaded  to  receive  the  ends  of  pipes  and  sprinklers. 
These  are  important  parts  and  must  be  made  of  a  fine  grade 
and  of  high  strength,  otherwise  they  will  contain  imperfections 
that  cause  leaks  all  the  more  annoying  if  minute  and  hard  to 
find  or  they  will  break.  When  strain  comes  on  sprinkler  piping 
it  is  usually  exerted  through  considerable  leverage  on  some  fitting 
which  by  nature  is  less  well  fitted  to  stand  it  than  the  ductile 
pipe,  hence  it  is  very  important  to  have  the  best  of  castings. 

For  proper  control  of  the  water  supplies  and  for  the  sub- 
division of  a  system  to  agree  with  the  fire  cut-offs  a  considerable 
number  of  valves  is  necessary,  though  it  is  always  desirable 
to  have  as  few  as  possible  for  the  simpler  the  control  the  less 
chance  there  is  of  a  vital  mistake  in  the  use  of  them  in  emergency. 


69 

Those  for  the  positive  control  of  the  water  flow  are  gate 
valves,  that  is,  essentially  a  bronze  disc  sliding  in  guides  of 
the  same  material  right  across  the  pipe,  something  like  the 
gate  in  a  dam.  The  general  arrangement  of  an  ordinary  valve 
is  familiar  to  most  people,  but  valves  for  sprinkler  systems 
have  been  proven  to  require  some  means  of  indicating  whether 
they  are  open  or  shut,  in  order  to  safeguard  against  being  wrongly 
closed,  which  makes  a  system  inoperative.  The  only  valves 
without  indicators  of  some  sort  are  the  very  small  ones  and  those 
in  the  street  or  some  similar  location  that  must  therefore  be 
buried  in  the  ground  and  not  allowed  to  project.  For  inside 
piping  the  best  type  is  the  outside  screw  and  yoke  valve,  named 
from  its  appearance,  in  which  the  stem  protrudes  beyond  the 
yoke  when  the  valve  is  open  and  does  not  protrude  when  closed. 
There  is  a  formerly  much  used  type  called  the  traget  indicator, 
in  which  a  sliding  plate  uncovered  the  words  "Open"  or  "Shut" 
as  the  position  of  the  valve  required.  This  latter  type  of  indi- 
cator is  less  certain  and  less  strong  than  the  other.  Violent 
partisan  warfare  was  once  waged  over  the  relative  merits 
of  the  two. 

Where  the  valve  is  underground  a  cast  iron  post  is  bolted 
over  it  through  which  runs  a  wrench  rod  to  a  nut  on  the  top 
of  the  post  above  the  ground  and  the  rod  carries  a  target  indi- 
cator read  through  a  glass  inserted  in  the  post  casting.  These 
post  indicators  are  made  of  different  lengths,  to  bring  the  top 
about  3)^  feet  above  ground,  a  total  length  of  9  or  10  feet  up 
north  to  43^  or  5  feet  in  the  warm  countries.  There  has  been 
much  trouble  with  post  indicators.  If  improperly  bolted  to 
the  valve  the  frost  heaves  them,  lifting  the  wrench  off  the  valve 
nut,  and  then  the  target  indicates  but  it  does  not  mean  any- 
thing because  the  valve  does  not  move.  The  post  may  not 
drain  properly  and  if  the  valve  stuffing  box  leaks,  the  water 
will  surely  freeze  round  the  wrench  rod  in  severe  cold  weather 
and  the  rod  cannot  be  turned.  Then  you  dig  the  post  up. 
Zero  weather  perhaps  and  five  feet  of  frost,  a  nice  job.  They 
have  been  know  to  get  indicator  targets  threaded  wrong  for 
the  valve,  then  the  sign  says  "Open"  when  it  ought  to  say 
"Shut."  The  inspection  of  a  post  indicator  valve  ought  always 
to  be  careful  and  especially  at  the  first  inspection  after  installa- 
tion, absolutely  convincing,  which  means  that  the  valve  must 
be  closed  and  the  inside  drip  tried  and  gauge  pressure  examined 
and  then  opened  and  the  same  things  done,  and  comparison 
made  to  determine  that  the  target  actually  meant  what  it  said. . 
For  lack  of  a  proper  test  such  valves  have  been  closed  for  months 
without  detection  and  the  sprinkler  system  consequently  useless. 

Whenever  possible  the  outside  gate  is  the  only  one  used, 
because  it  is  easily  accessible  even  if  the  building  is  on  fire, 
whereas  if  there  were  also  or  only  an  inside  valve  this  might 
be  shut  by  accident  or  for  repairs  and  be  inaccessible  so  that 


70 

it  could  not  be  opened.  An  outside  valve  must  be  placed  where 
it  cannot  be  made  inaccessible  during  a  fire,  either  by  falling 
debris  or  by  exposure,  for  it  is  absolutely  essential  to  be  able 
to  shut  ofif  the  water  when  the  system  is  wrecked  or 
overtaxed  in  order  to  conserve  the  water  supply  for  the  pro- 
tection of  other  buildings. 

It  is  necessary  to  keep  all  controlling  valves  always  free 
from  obstruction  so  that  they  iliay  be  operated  quickly.  In 
case  of  a  break  in  the  system  any  delay  in  shutting  the  valve 
means  a  greatly  increased  water  loss.  A  recent  case  of  seven 
minutes'  delay  cost  $3,000.  At  that  rate  delay  comes  high. 
If  a  valve  is  hidden  behind  a  pile  of  cotton  bales  or  cased  goods, 
it  might  require  half  an  hour,  perhaps  longer,  to  remove  the 
stock  in  order  to  reach  it  even  if  men  were  available,  and  at  night 
they  seldom  are,  therefore  it  is  obvious  what  an  important 
matter  this  is.  Though  most  valves  of  a  sprinkler  system  are 
normally  open,  they  are  not  examined  to  make  sure  of  it  when 
they  are  obstructed. 

Nowadays  the  controlling  valves  are  of  one  well  under- 
stood type,  but  formerly  there  were  some  of  a  positively  dan- 
gerous design.  One  such  type  was  in  use  in  a  certain  flour 
mill.  It  was  a  quick  opening  valve  with  sector  gears  inside 
the  case  which  made  the  valve  move  just  opposite  to  the  ordinary 
one.  When  the  lever  was  moved  in  the  direction  that  opened 
ordinary  valves  it  closed  this  kind  and  it  fooled  a  good  many 
people  so  that  these  valves  were  often  found  shut. 

Even  yet  there  are  valves  in  use  the  handwheels  of  which 
turn  to  the  left  to  close,  just  opposite  to  the  most  common  sort, 
and  a  large  proportion  of  those  for  underground  pipe  operate 
that  way.  They  are  often  called  "left  hand"  valves,  but  this 
is  confusing  because  different  valve  foundries  construe  this 
term  contrarily.  Nowadays  valves  for  inside  work  close  by 
turning  the  wheel  to  the  right.  Every  valve  has  an  arrow  on 
it  pointing  to  the  words  "Open"  or  "Close,"  usually  the  former 
and  the  arrowhead  shows  which  way  to  turn,  to  be  found  on 
the  wheel  or  some  other  prominent  place.  With  this  explanation 
it  is  evident  that  one  must  not  take  it  for  granted  in  which 
direction  a  valve  turns  but  must  examine  it  to  find  out.  This 
is  impossible  in  valves  underground  where  it  is  doubly  important 
to  be  sure,  because  such  valves  almost  always  control  very 
important  sections  of  a  fire  system.  A  lack  of  these  precautions 
has  resulted  in  leaving  the  water  shut  off  for  long  periods  unbe- 
known. It  is  often  quite  a  difficult  matter  to  test  the  condition 
of  an  underground  valve  conclusively. 

The  other  kind  of  a  valve  which  is  commonly  used  in  a 
system  is  a  swinging  check  valve.  This  permits  water  to  pass 
in  one  direction  but  prevents  it  from  passing  in  the  opposite 
way.  In  principle  it  is  a  bronze  disc  swinging  against  an  inclined 
seat,  and  cannot  be  controlled  by  hand  in  the  type  now  in  use, 


71 

but  acts  automatically.  Such  a  valve  is  placed  underground 
at  the  point  where  each  supply  comes  into  the  general  system 
and  the  object  is  automatically  to  confine  to  the  system  any 
water  put  into  it.  The  reason  for  this  is  that  without  shutting 
off  any  supply  it  is  often  necessary  to  maintain  for  fire  use 
a  pressure  in  the  system  higher  than  exists  at  the  time  in  the 
mains  of  some  of  the  supplying  systems.  In  the  extreme  case, 
that  of  a  break  in  the  supplying  system  it  might  not  be  possible 
to  maintain  any  pressure  in  the  private  mains  until  the  gate 
valve  between  was  shut,  which  requires  considerable  time, 
if  it  were  not  for  the  check  valve,  which  acts  instantly  auto- 
matically. The  maximum  value  of  the  check  valve  is  evident 
when  it  is  considered  that  such  a  break  might  occur,  yes,  has 
occurred,  at  the  same  time  a  fire  started  in  the  risk. 

Usually  the  only  thing  that  puts  a  check  valve  out  of 
service  is  something  that  comes  through  the  mains  and  sticks 
under  it  so  as  to  prevent  it  from  closing,  such  as  a  block  of  wood 
or  stones.  This  is  not  an  unusual  happening  in  some  systems. 
The  obstruction  can  be  removed  by  taking  off  the  bonnet  but 
this  means  excavating  to  the  valve.  To  prevent  digging  in 
such  cases,  check  valves  and  gate  valves  in  underground  pipe 
are  frequently  placed  in  a  manhole,  convenient  but  expensive. 

Everybody  understands  that  a  sprinkler  system  is  useless 
if  the  water  supply  is  shut  off,  yet  a  good  many  gate  valves 
are  found  closed,  most  of  them  from  forgetfulness  after  some 
necessary  repair  job  is  completed.  Every  little  while  a  total 
loss  occurs  because  of  this.  Consequently  it  is  the  constant 
aim  of  the  inspection  bureaus  to  detect  and  guard  against  this 
error.  Most  of  them  practice  sealing  valves  open,  that  is  putting 
a  wire  or  band  through  the  wheel  and  around  the  pipe  and 
securing  the  ends  with  a  seal  press  so  that  the  valve  cannot 
be  closed  without  breaking  the  band,  which  bears  an  identi- 
tification  tag  that  is  expected  to  be  sent  to  the  bureau  if  the 
seal  is  thus  broken,  whereupon  the  bureau  investigates  and  should 
make  sure  that  the  valve  is  opened  again.  This  plan  does  some 
good  but,  as  practiced,  not  what  its  ardent  admirers  profess 
to  believe,  because  the  man  that  needs  the  supervision  most 
is  the  one  that  doesn't  get  it  as  he  will  not  take  the  trouble 
to  send  in  the  tag.  It  would  be  quite  feasible  to  issue  numbered 
tags  and  check  them  up  in  such  a  way  that  the  removal  of 
a  tag  valve  could  be  incontrovertibly  established  and  the 
record  for  each  risk  made  so  plain  that  no  property  could  afford 
to  ignore  it  or  fail  to  decrease  such  vital  carelessness  on  the 
part  of  his  management. 

Some  advocate  straps  with  locks,  instead  of  wire,  because 
straps  can  be  cut  in  emergency  more  readily  than  wire  and  they 
even  hang  a  knife  at  the  valve.     The  principle  is  the  same. 


Automatic  Sf)rinkler  Protection 

Second  Pat)cr 

BY 

F.  C.  MOORE 

When  all  parts  of  a  building  are  so  warm  that  water  will 
not  freeze  in  the  coldest  weather,  it  is  expected  that  water 
will  be  kept  in  the  pipes  at  all  times  and  no  provision  is  made 
for  any  other  condition,  and  this  is  known  as  a  "wet"  system. 
There  are  many  buildings  where  water  would  freeze  in  winter, 
such  as  foundries,  saw  mills,  many  warehouses,  or  perhaps 
only  parts  of  buildings  such  as  show  windows,  coal  bins,  attics, 
shed  additions.  Unless  it  is  feasible  to  provide  heating,  the 
system  in  such  places  must  either  be  shut  off  in  the  winter  or 
special  devices  installed  so  that  the  pipes  will  be  empty  until 
a  sprinkler  opens  and  then  water  will  be  admitted  automatically. 
A  system  maintained  in  this  latter  manner  is  called  a  "dry" 
system. 

The  method  is  to  put  into  the  supply  main  a  device  called 
a  dry  valve,  the  object  of  which  is  to  act  as  an  automatic  water 
valve  which  opens  when  the  air  pressure  pumped  up  in  the  sys- 
tem is  reduced  by  any  opening,  normally  of  course  by  the  opening 
of  sprinklers.  It  is  so  designed  that  a  given  air  pressure  will 
counterbalance  about  six  times  as  much  water  pressure,  that 
is,  at  the  customary  working  pressures. 

Dry  valves  accomplish  their  purpose  by  the  principle  of 
differential  areas,  that  is,  the  surface  of  the  air  side  of  the 
valve  is  enough  larger  than  that  of  the  water  side  to  balance 
as  desired,  or.  a  system  of  levers  produces  the  same  result. 
Obviously  there  must  be  no  corrosion  or  other  influence  to 
cause  such  a  valve  to  stick,  and  a  slight  sticking  may  be  so 
multiplied  in  effect  by  the  leverage  that  it  will  prevent  the 
valve  from  operating.  Therefore,  these  valves  are  carefully 
designed  to  avoid  any  such  trouble. 

To  equip  a  dry  system  requires  especial  care  from  the 
beginning.  The  sprinklers  are  tested  under  air  pressure,  the 
piping  is  put  up  with  greater  care  and  the  greatest  care  taken 
to  see  that  all  parts  are  arranged  to  drain  back  to  the  main  riser. 
In  addition  to  the  dry  valve  an  air  pump  must  be  provided  and 
it  should  always  be  a  power  pump,  for  getting  up  40  pounds 
pressure  with  a  hand  pump  is  a  backbreaking  job  that  a  mechanic 
learns  to  sidestep  soon.     As  neglect  to  keep  up  the  pressure 


73 

results  in  the  tripping  of  the  dry  valve  and  entry  of  water  which 
may  quickly  freeze  and  burst  piping,  it  is  worth  while  to  make 
the  pumping  easy,  as  most  systems  will  need  pumping  once 
a  week,  though  they  should  not  lose  more  than  eleven  to  fourteen 
pounds  air  pressure  in  that  time,  and  many  of  them  will  not 
lose  so  much. 

A  dry  system  costs  more  per  sprinkler  than  a  wet  system  > 
not  only  because  of  the  additional  devices,  but  also  because  of 
the  greater  care  in  installation  and  the  possibility  of  being 
obliged  to  make  painstaking  tests  of  the  system  to  detect  minute 
air  leaks,  sometimes  requiring  days  going  over  joints,  castings 
and  heads  with  soap  solution  in  which  the  leak  will  blow  plainly 
visible  soap  bubbles.  Before  going  to  this  trouble,  however, 
the  pipers  admit  water  to  the  system  so  that  as  many  of  the 
leaks  as  possible  may  be  closed  by  rust.  Of  course  the  larger 
leaks  will  allow  water  to  issue  but  air  will  leak  where  water 
cannot  pass,  and  it  is  this  characteristic  that  makes  the  extra 
care  so  necessary. 

It  is  better  to  put  a  dry  system  into  a  cold  place  than  to 
shut  off  the  sprinklers  there  in  cold  weather.  Nevertheless, 
the  dry  system  has  marked  disadvantages  compared  with  the 
wet  system  and  should  never  be  used  when  it  can  be  avoided. 

To  begin  with,  there  is  the  delay  while  the  air  pressure  is 
decreasing,  the  valve  tripping,  and  the  water  coming.  This 
is  not  the  principal  disadvantage.  The  time  consumed  is 
ordinarily  about  45  seconds  to  one  minute  but  may  be  a  little 
less  or  as  much  as  two  minutes  or  more,  according  to  circum- 
stances. On  a  wet  system  water  issues  the  instant  the  sprinkler 
opens. 

The  principal  disadvantage  is  undoubtedly  the  interruption 
to  service  that  comes  from  the  necessity  for  repairs  to  the  valve, 
from  difficulty  in  setting  it  properly  when  it  trips,  from  damage 
from  freezing  when  the  air  pressure  is  not  properly  maintained 
and  water  enters. 

Furthermore,  there  is  a  chance  by  no  means  infrequent 
that  some  part  of  the  system,  from  a  few  heads  up  to  36  or  more, 
will  be  out  of  service  because  of  ice  in  the  pipes. 

Finally,  the  dry  valve  may  become  inoperative  from  corro- 
sion or  deposits  from  the  water,  in  which  case  the  whole  system 
will  be  shut  off.  It  is  only  fair  to  say  that  but  few  cases  have 
been  proven  to  occur  in  time  of  fire.     . 

A  dry  valve  is  often  very  troublesome  to  set  when  it  trips 
and  this  often  results  in  leaving  the  system  shut  off  over  night. 
The  seats  are  easily  marred  by  improper  handling,  so  that 
they  leak  and  the  valve  then  has  to  be  sent  to  the  makers  for 
repairs.  A  flanged  pipe  is  expected  to  be  kept  on  hand  so  that 
it  can  be  put  in  place  of  the  dry  valve  to  make  the  piping  intact 


74 

and  permit  the  use  of  the  system  in  emergency  by  opening  the 
gate  valve.  This  precaution  is  more  honored  in  the  breach 
than  in  the  observance. 

If  the  air  pressure  gets  too  low  and  the  valve  trips,  in 
winter  the  water  is  likely  to  freeze  before  the  system  can  be 
drained,  especially  if  the  trouble  occurs  at  night.  Then  pipes 
or  fittings  burst  and  the  system  must  be  shut  off  till  repairs 
are  made.     These  are  not  infrequently  unnecessarily  delayed. 

In  many  of  the  dry  systems  in  winter  and  at  any  time  in 
those  in  low  temperature  cold  storage  rooms,  ice  may  form  so 
as  to  close  completely  pipes  up  to  4  inch  diameter  as  practice 
shows,  but  usually  the  smaller  pipes  are  the  ones  affected. 
Such  a  plug  of  ice  cuts  off  the  water  supply  from  sprinklers 
beyond  it  and  thus  leaves  some  section  without  sprinkler  pro- 
tection. Some  recent  investigations  have  shed  interesting 
light  on  the  presence  of  ice  in  dry  systems  and  special  reference 
to  this  subject  will  be  made  elsewhere. 

The  dry  valve  may  become  stuck  fast  so  that  it  will  not 
open  at  all,  in  which  case  that  particular  system  is  absolutely 
shut  off.  I  have  not  been  able  to  learn  of  many  cases  where, 
after  the  fire,  this  has  been  proven  to  have  happened.  There 
have  been  quite  a  number  of  cases  where  test  has  proved  the 
dry  valve  to  be  stuck,  but  generally  speaking,  inspection  organ- 
izations are  ignorant  of  the  condition  of  dry  valves  because 
they  do  not  test  them  by  tripping  them.  The  makers  of  the 
valves  recommend  that  they  be  not  tested  but  merely  examined 
through  the  hand  hole,"  because  an  unskilled  person  has  trouble 
in  resetting  the  valve  and  may  damage  it,  furthermore,  it  is 
hard  to  drain  any  system  completely  and  practically  impossible 
to  drain  those  where  piping  has  sagged  without  disconnecting 
pipes  at  that  point. 

Therefore,  many  a  dry  valve,  if  not  tripped  by  reason  of 
fire  or  accidental  leakage,  remains  for  years  without  operating. 
This  is  the  most  difficult  condition  for  any  mechanical  device, 
to  leave  it  motionless  for  years  without  use  of  any  kind  and  then 
suddenly  call  upon  it  to  perform  its  normal  function.  Even  the 
human  body,  that  most  perfect  machine,  will  not  stand  that 
test,  as  evidenced  by  the  rigid,  immovable  arm  or  leg  of  an 
Indian  fakir.  When  dry  valves  fail  it  is  usually  due  to  rust 
or  deposits  from  the  water  in  places  where  they  prevent  the 
valve  from  moving. 

Dry  systems  give  less  reliable  protection  than  wet  systems 
and  grading  schedules  have  a  defect  charge  for  them.  If  there 
is  any  error,  it  is  in  not  penalizing  them  sufficiently.  There 
was  recently  published  a  comparison  of  efficiencies  of  the  wet 
and  the  dry  s^^stem  obtained  by  a  comparison  of  the  N.  F.  P.  A. 
statistics.  It  is  not  of  much  value  in  regard  to  comparisons  of 
losses  because  the  information  concerning  the  amount  of  losses 
was  altogether  too  vague.     Every  loss  up  to  $5,000  was  called 


75 

a  "small  loss"  and  every  one  above  that  amount  a7' large  loss" 
and  that  was  as  close  as  they  tabulated,  ^ost  of  the  other 
comparisons  are  good.  It  shows  that  although  the  water  pres- 
sure averaged  a  little  higher  at  the  fires  under  dry  systems  the 
average  nuinber  of  heads  opened  per  fire  was  11.97,  or  1.8 
times  as  many  as  on  wet  systems,  which  averaged  6.54,  a  showing 
undoubtedly  due  principally  to  the  delay  in  discharging  water 
from  a  dry  system.  In  regard  to  extinguishing  and  holding 
in  check  fires,  the  two  systems  were  about  equal  but  of  fires 
unsatisfactorily  handled  there  were  6.4%  under  dry  systems, 
a  very  marked  difference  to  the  disadvantage  of  the  dry  system. 
Strange  to  say,  of  fires  for  which  no  claim  for  loss  was  made 
the  dry  system  showed  42.8%  and  the  wet  system  30.3,  which 
is  not  readily  explainable. 

Notwithstanding  the  efficiency  of  sprinkler  protection 
it  should  be  supervised  in  operation  to  guard  against  abnormal 
conditions  and  prevent  undue  water  damage  and  be  backed 
up  by  the  operation  of  hose  streams  and  other  manually  operated 
devices,  therefore  alarm  valves  have  been  devised  for  sprinkler 
systems,  each  of  them  called  into  action  by  the  fiow  of  water 
in  the  sprinkler  riser,  resulting  in  ringing  a  loud  gong  usually 
placed  outside  the  building,  frequently  with  a  second  gong 
inside  the  building.  The  object  is  to  give  notice  that  the  system 
is  operating  so  that  the  watchman  or  some  passer  will  investi- 
gate or  call  help,  serving  as  a  fire  alarm  or  a  leakage  alarm, 
as  the  case  may  be. 

It  is  interesting  to  note  that  Parmelee's  system  was  under 
one  plan  arranged  to  blow  the  factory  whistle  by  means  of  a 
cord  attached  to  the  movable  parts  of  the  sprinkler  and  in  the 
90' s  there  was  a  thermostat  combined  with  a  Grinnell  sprinkler 
in  use,  which  operated  from  the  release  of  the  moving  parts  of 
the  sprinkler  to  which  one  end  of  the  thermostat  spring  was 
attached,  or  by  the  action  of  heat  on  the  spring. 

On  a  wet  system  the  alarm  valve  is  usually  some  form  of  a 
check  valve  placed  in  the  main  riser  just  inside  the  gate  valve 
or  as  close  to  where  the  riser  branches  from  the  supply  main 
as  possible,  for  one  important  function  of  the  alarm  valve  is 
to  give  notice  when  the  water  flow  is  due  to  an  accident  and 
it  is  therefore  desirable  to  have  it  protect  as  much  of  the  piping 
as  possible.  When  water  flows  the  check  rises  and  this  uncovers 
the  inlet  to  a  small  pipe  which  leads  to  a  chamber  which  the 
water  fills  after  a  few  seconds  exerting  pressure  on  a  diaphragm 
actuating  a  switch  closing  a  gong  circuit  and  also  a  part  of  the 
water  flows  through  another  branch  of  the  small  pipe  to  a 
little  turbine  water  wheel  that  carries  a  tongue  on  the  projection 
of  its  shaft,  which  strikes  a  gong.  Some  times  both  are  not 
used,  but  the  idea  is  to  make  an  alarm  doubly  sure  and  not 
dependent  solely  upon  the  integrity  of  an  electric  bell  circuit. 


76 

Annoying  false  alarms  occur  when  water  hammer  causes 
pressure  increases^nd  especially  after  a  system  has  been  emptied 
for  it  contains  a  good  deal  of  air  which  is  gradually  compressed 
or  leaks  out,  when  the  entering  water  causes  an  alarm.  To 
prevent  these  false  alarms  the  retarding  chamber  referred  to 
has  a  small  waste  hole  proportioned  so  as  to  require  an  appre- 
ciable time  to  fill  the  chamber  enough  to  exert  pressure  to  close 
the  switch,  yet  not  delay  enough  to  be  vital  in  case  of  actual 
need.  The  tendency  to  give  false  alarms  is  increased  by  any 
manner  of  piping  the  drip  from  the  retarding  chamber  which 
permits  it  to  be  clogged  up  or  even  partially  obstructed  and 
much  of  the  false  alarm  trouble  is  due  to  neglect  of  these  pre- 
cautions. The  end  of  the  drip  pipe  from  the  retarding  chamber 
should  be  open,  then  if  it  is  clogged  it  will  be  detected  and  no 
water  can  back  up  into  the  chamber  to  close  the  circuit  that  way. 

False  alarms  from  surges  in  the  pressure  in  the  mains  are 
sometimes  prevented  by  pumping  up  a  pressure  inside  the 
sprinkler  system  higher  than  any  probable  increase  in  the  out- 
side pressure.  The  alarm  valve,  being  a  check  valve,  holds 
this  excess  in  the  system  and  is  thereby  prevented  from  opening. 
The  maintenance  of  the  pressure  requires  occasional  pumping 
and  the  desire  to  maintain  it  with  the  least  trouble  makes  the 
owner  unwilling  to  permit  customary  flow  tests  from  drip  valves. 

One  of  the  worst  results  of  false  alarms  is  that  after  repeated 
trouble  some  impatient  mechanic  will  shut  the  alarm  off  alto- 
gether. 

It  not  infrequently  happens  that  no  alarm  will  be  given 
for  small  flows,  such  as  that  of  one  sprinkler.  For  these  reasons 
some  organizations  do  not  require  alarm  valves,  but,  especially 
where  there  is  no  watchman,  they  are  usually  required.  Except 
these  limitations  the  worst  accusation  is  that  an  alarm  valve 
is  another  obstruction  to  water  flow.  When  it  is  connected 
to  a  fire  alarm  system  or  central  station  system,  false  alarms 
occasionally  call  out  the  fire  department  to  their  great  vexa- 
tion. An  alarm  valve  should  be  designed  to  permit  flow  without 
loss  of  pressure,  to  be  free  from  sticking  from  corrosion  or  other- 
wise, to  be  sensitive  to  small  flows  and  yet  not  give  false  alarm. 
Modern  types  are  not  perfect,  but  some  of  the  older  types, 
especially  those  with  spindles  projecting  outside  the  valve 
casting,  were  a  positive  danger  because  the  spindle  would  get 
stuck  in  the  stuffing  box  and  hold  the  check  valve  from  opening. 
This  sort  is  no  longer  made  but  occasionally  one  is  found  in 
service. 

The  dry  valves  all  have  provision  for  an  alarm,  some  of 
which  are  operated  by  electrical  contacts  caused  by  the  falling 
of  the  levers,  and  others  by  the  flow  of  water  in  an  auxiliary 
pipe  as  with  wet  systems,  but  if  a  dry  system  is  allowed  to  have 
water  in  the  pipes  in  summer  then  during  such  time  the  alarm 
must  be  put  out  of  commission  or  it  would  ring  continuously. 


77 

Because  this  practice  is  quite  common  an  extra  charge  is  made 
in  the  sprinkler  leakage  rate  for  a  dry  system. 

In  addition  to  the  difficulty  of  adjusting  alarm  valves  to 
the  varying  conditions  even  in  the  same  risk,  the  electrical 
gong  circuit  gives  trouble  in  many  places  from  neglect  to  look 
after  the  batteries  or  injury  to  the  wiring  and  the  water  rotary 
gong  from  sediment  stopping  up  the  nozzle  in  the  turbine  or 
some  doughty  sparrow  building  a  nest  inside  the  gong  to  prevent 
which  the  gong  should  be  and  usually  is  screened. 

Notwithstanding  the  imperfections  of  alarm  valves  they 
are  of  value,  more  especially  in  risks  where  the  watchman  service 
is  not  good  or  entirely  absent  and  alarms  have  saved  much 
water  damage.  Out  of  2,031  alarms  tabulated  from  different 
sources,  840  were  from  the  alarm  valves,  which  gives  some  idea 
of  their  use. 

The  best  system  is  useless  if  proper  water  supplies  are  not 
provided.  In  my  opinion  their  relative  value,  all  things  con- 
sidered is,  municipal '  or  large  private  water  system,  gravity 
tanks,  pumps,  pressure  tanks,  which  broadly  enumerates  all 
the  customary  kinds.  Possibly  there  may  be  some  disagreement 
about  relative  order  of  importance.  Although  the  possible 
need  for  a  large  volume  at  high  pressure  must  not  be  over- 
looked, statistics  show  that  85%  of  the  fires  are  extinguished 
by  not  more  than  twelve  heads,  therefore,  it  is  obvious  that 
an  instantaneously  available  supply  sufficient  for  a  moderate 
number  of  sprinklers  will  take  care  of  the  majority  of  cases,  but 
it  must  be  ever  ready,  and  so  simple  and  easily  cared  for  that 
it  will  always  be  in  order,  and  the  possibility  of  opening  many 
more  heads  must  not  be  overlooked. 

'  A  city  water  supply  from  gravity  reservoirs  of  good  pressure, 
in  a  city  large  enough  to  have  a  good  water  works  organization 
and  large,  cross  connected  mains,  is  the  ideal,  giving  reliability, 
pressure  and  capacity.  From  that,  public  systems  vary  down 
to  those  which  might  actually  be  of  less  value  than  a  good 
gravity  tank  on  the  risk.  Pressure  alone  under  the  ordinary 
local  service  conditions  must  never  be  accepted  as  evidence 
of  efficiency.  The  ability  to  maintain  effective  pressure  under 
draught  at  the  risk  equal  to  what  would  be  made  at  time  of 
fire  is  what  must  be  established  by  actual  test,  before  such 
a  water  supply  can  be  approved.  It,  is  too  often  neglected. 
Beware  the  high  pressures  of  the  little  town  or  village;  capacity 
is  often  lacking.  Pressures  of  100  to  125  pounds  will  be  drawn 
down  to  25  or  30  pounds  by  two  or  three  hose  streams.  The 
actual  test  detects  closed  valves,  obstructed  mains,  and  no 
study  of  plans  or  surface  indications  can  ever  be  a  safe  sub- 
stitute. 

Of  course  there  are  gravity  reservoir  supplies  that  are  of 
too  low  pressure  or  too  poor  pipe  design  to  be  good  for  sprinkler 
systems.    Years  ago  in  Albany  I  awoke  thirsty  about  one  o'clock 


78 

one  night  and  found  the  water  would  not  run  on  the  third  floor 
of  the  hotel.  The  investigation  next  morning  developed  that 
the  city  had  been  obliged  by  shortage  of  water  in  the  reservoirs 
to  close  almost  completely  the  valve  for  the  whole  mercantile 
portion  of  the  city  at  night  in  an  endeavor  to  save  what  they 
could.  This  lasted  a  long  time,  although  they  adopted  additional 
precautions.  There  was  not  supply  enough  for  fire  engines 
until  the  valve  was  opened. 

Many  towns  have  standpipes  which  are  filled  by  pumping. 
They  are  practically  tall  tubes  of  small  diameter  for  their  height 
which  means  that  although  the  pressure  when  they  are  full 
is  comparatively  high,  it  may  diminish  greatly  during  the  day 
or  overnight  on  account  of  draught,  if  pumping  is  not  constant. 
No  such  standpipe  should  ever  be  used,  but  if  any  such  storage 
is  necessary  it  should  be  in  a  large  diameter  tank  elevated  on 
a  tower,  if  necessary,  so  that  even  if  the  tank  becomes  nearly 
empty,  the  decrease  of  pressure  will  be  nominal. 

Other  town  systems  do  not  even  use  a  standpipe  but  pump 
directly  into  the  mains,  everything  depending  on  the  pumps, 
which  may  be  in  a  dilapidated  wooden  pumphouse  in  a  frame 
range  on  the  river  bank,  to  select  the  worst  type. 

The  public  water  system  has  one  great  advantage,  that 
it  will  certainly  be  shut  off  the  mains  only  for  the  shortest  possi- 
ble time  if  at  all,  because  so  much  complaint  will  otherwise 
arise. 

Gravity  tanks  combine  cheapness  and  low  maintenance 
with  feasibility.  They  can  usually  be  set  up  somewhere  on  or 
near  every  plant  and  when  city  water  is  not  available,  are  almost 
invariably  used,  A  common  rule  to  estimate  the  size  is  to  make 
the  capacity  that  which  would  supply  20  gallons  per  minute 
for  twenty  minutes  to  one-quarter  of  the  sprinklers  on  one 
floor,  which  amounts  to  100  gallons  a  sprinkler  for  all  the  sprink- 
lers on  one  floor,  but  a  tank  of  less  than  10,000  gallons  is  nowadays 
seldom  erected.  There  is  no  minimum  stated  in  the  sprinkler 
rules,  though  local  organizations  may  have  one.  A  5,000  gallon 
tank  is  a  small  one,  as  they  go,  and  it  has  been  years  since  I 
have  seen  a  new  one  so  small.  Tanks  of  40,000  and  50,000 
gallons  are  quite  common  and  we  recall  one  of  100,000  gallons 
on  a  trestle  150  feet  high.  These  large  tanks  practically  always 
supply  hydrants  as  well  as  sprinklers  and  for  this  dual  use  a 
30,000  gallon  tank  is  the  smallest  advised  and  it  s:hould  be 
even  larger.  The  exact  details  of  tank  installation  are  left  by 
the  rules  to  the  local  inspection  departments. 

Formerly  the  tanks  were  wooden.  Those  of  moderate 
size  are  so  built  now  in  most  cases.  Steel  is  now  generally  used 
for  the  larger  tanks.  It  is  generally  believed  both  kinds  need 
painting  at  intervals  for  the  best  preservation.  A  wooden  tank 
will  always  leak  at  first  because  the  staves  are  expected  to  swell 
on  absorbing  water,  hence  the  hoops  cannot  be  tightened  until 


79 

the  wood  has  ceased  swelling,  as  it  does  after  a  few  days.  Tanks 
may  and  have  burst  when  the  hoops  were  tightened  too  soon. 
If  a  tank  continues  to  leak  after  it  has  had  a  chance  to  swell 
for  ten  days  it  never  will  become  tight  by  that  method  and 
some  defect  will  be  found.  Tanks  cannot  be  allowed  to  leak 
for  this  is  apt  to  cause  decay  of  the  supports  and  will  result 
in  the  formation  of  heavy  masses  of  ice  on  parts  not  designed 
to  carry  them  and  the  ice  may  fall  and  maim  or  kill  persons. 

Flat  Hoops  —  Expansion  and  Swing  Joints  —  Telltales 

Most  of  the  tanks  are  placed  on  top  of  the  buildings  they 
supply  and  in  the  heart  of  cities  that  is  the  only  available  place. 
The  concentrated  load  is  great  and  the  strength  of  the  building 
and  its  foundation  must  be  ascertained  to  be  sufficient  before 
the  tank  is  erected,  otherwise  the  building  may  collapse  and 
fatalities  occur.  For  the  same  reason  the  condition  of  tank 
and  supports  must  be  watched  during  its  lifetime  and  any  weak- 
ness at  once  repaired.  Some  bad  accidents  of  this  kind  have 
occurred.  Even  the  steel  trestles  have  rusted  out  and  fallen 
and  care  should  be  taken  that  every  part  of  a  steel  trestle  is 
accessible  for  inspection  and  painting.  On  a  match  warehouse 
in  St.  Louis  such  a  trestle  was  boxed  up  where  it  passed  through 
the  roof  and  in  a  few  years  rust  reduced  its  area  by  two-thirds. 
It  fell  and  the  impact  set  the  matches  on  fire  which  pretty  well 
completed  the  destruction. 

The  gravity  tank  is  simple,  cheap  and  reliable  with  ordinary 
care.  Its  operating  force,  gravitation,  is  always  on  the  job, 
which  is  a  great  point.  In  capacity  and  pressure  the  tank  has 
to  yield  to  some  other  supplies,  but  in  ever-readiness  and  general 
adaptability  it  has  all  the  others  beaten.  Where  high  initial 
pressure  is  necessary,  as  in  a  furniture  factory,  a  tank  is  handi- 
capped, and  one  of  moderate  capacity  may  be  exhausted  before 
the  fire  is  controlled,  but  for  the  average  conditions,  the  tank 
is  the  chief  reliance  of  sprinklers. 

Though  not  difficult  to  maintain  yet  it  must  be  heated 
in  winter,  by  hot  water  heater,  open  ended  steam  jet  or  return 
coil,  or,  less  often  now,  by  enclosing  in  a  heated  tower.  It  has 
to  be  replenished  with  water,  most  handily  by  a  by-pass  around 
the  check  valve,  quite  often  by  a  separate  filling  pipe.  Mudd}^ 
water  has  to  be  kept  out  of  it  or  mud  will  go  into  the  sprinkler 
system  though  the  most  of  it  stays  in  the  tank  because  the 
outlet  pipe  is  required  to  project  4  inches  above  the  tank  bottom 
for  this  purpose.  They  took  out  several  cart  loads  of  mud 
from  a  large  steel  tank  in  Manchester.  As  there  was  no  blow-off 
they  had  to  draw  it  out  in  buckets  and  empty  it  over  the  side. 
It  would  have  cost  less  to  filter  the  water. 

Pressure  tanks  were  the  outgrowth  of  a  desire  to  obtain 
from  a  tank  a  heavier  pressure  than  a  gravity  tank  would  pro- 
vide and  probably  somewhat  to  the  attempt  to  reduce  the  amount 


80 

of  water  in  view  of  the  high  pressure.  A  pressure  tank  is  a  cylin- 
drical steel  tank,  with  its  length  horizontal,  in  service  filled 
two-thirds  full  of  water  and  the  rest  with  air  ordinarily  at  about 
75  pounds  pressure,  connected  from  the  bottom  to  the  sprinkler 
system.  When  water  is  discharged  from  the  system  the  com- 
pressed air,  expanding,  drives  the  water  out  of  the  tank  to 
the  sprinklers  and  under  the  conditions  named,  the  last  of 
the  water  will  leave  the  tank  at  a  pressure  of  15  pounds 
which  is  a  little  more  than  the  pressure  on  the  top  sprinklers 
from  an  ordinary  gravity  tank  when  full.  Therefore  the  pressure 
tank  at  its  lowest  gives  a  slightly  better  pressure  than  the  ordi- 
nary gravity  tank  at  its  best,  assuming  that  the  pressure  tank 
is  located  on  the  roof  as  is  usual,  and  understanding  that  this 
comparison  would  not  be  strictly  true  with  large  or  exceptionally 
elevated  gravity  tanks. 

These  tanks  were  at  first  invariably  of  4,500  gallons  cubic 
capacity  (3,000  gallons  water)  but  they  are  now  frequently 
6,000  gallons  and  on  large  city  risks  9,000  gallons.  Beyond 
that  size  it  is  not  economical  to  go.  They  are  placed  on  the 
roof  but  are  not  elevated  above  it  like  gravity  tanks  since  com- 
pressed air  furnishes  the  desired  pressure,  not  gravity,  though 
the  latter  of  course  helps.  They  have  been  placed  lower  down 
in  the  building  where  more  convenient,  even  in  the  basement, 
but  this  requires  a  correspondingly  higher  air  pressure  to  offset 
the  difference  in  elevation  and  such  locations  arc  generally 
unacceptable.     Sometimes  several  are  placed  on  the  same  risk. 

It  is  a  troublesome  matter  to  maintain  the  water  at  the 
right  level  and  also  the  air  at  the  right  pressure.  It  is  common 
to  find  one  or  the  other  wrong.  Owing  to  these  difficulties  and 
the  limited  capacity,  a  pressure  tank  is  never  considered  as 
the  only  supply,  but  as  an  auxiliary  supply  with  some  other  of 
more  volume.  They  have  to  be  well  housed  in  a  warm  place 
and  are  considerably  more  troublesome  than  a  gravity  tank 
to  maintain  properly.  Their  most  common  use  is  with  gravity 
tanks  in  cities  where  it  is  not  feasible  to  use  city  water  or  pumps, 
as  in  New  York.  The  pressure  tank  is  the  least  used  of  all 
supplies  for  sprinkler  systems  and  it  is  not  advisable  to  use 
it  where  the.  other  types  are  available.  We  have  heard  of  only 
two  explosions  of  pressure  tanks,  part  of  one  being  blown  off 
the  roof  into  the  street  by  the  recoil. 

Pumps  of  various  kinds  are  used  when  the  motive  power 
is  available  when  there  is  no  other  supply  of  good  pressure  and, 
volume.  A  pump  is  practically  never  used  "as  the  only  supply 
for  a  system,  because  there  is  too  much  chance  it  will  be  out 
of  full  commission.  The  requirements  for  supplies  to  a  standard 
equipment  are  that  it  shall  have  two,  one  automatic  and  one 
capable  of  furnishing  water  under  heavy  pressure.  In  my 
opinion  no  private  fire  pump  is  automatic  to  the  degree  of 
reliability  the  term  demands  in  this  connection. 


81 

The  first  type  of  pump  thus  used  was  the  rotary,  which 
may  be  briefly  described  as  a  pair  of  broad  toothed  intermeshing 
gears  revolving  in  a  closely  fitted  case,  usually  drawing  in  the 
water  at  the  bottom  and  discharging  it  at  the  top,  driven  by 
a  shaft.  This  method  of  driving  was  always  available  in  an,y 
mill.  At  first,  driven  by  belting,  slippery  or  loose  if  wet  and 
capable  of  burning  off,  then  by  gears  sliding  into  mesh,  not 
sufficiently  flexible  and  breaking  from  careless  usage  in  the 
excitement  of  the  emergency,  and  finally  by  friction  clutches 
of  some  sort,  the  perfected  type  being  two  V-grooved  wheels 
face  to  face,  that  on  the  pump  shaft  moved  into  firm  contact 
with  the  other  by  a  hand  screw  —  safe  from  breakage,  but  too 
slippery  to  transmit  the  necessary  power  if  oil  gets  spattered 
over  them,  nevertheless  best.  These  pumps  often  badly  located 
under  the  floors  in  crowded  half  basements  of  the  mills,  conven- 
ient to  the  main  driving  shaft  but  likely  to  be  completely  disabled 
by  the  fall  of  the  building,  the  difficulty  of  access  resulting  in 
neglect,  they  were  frequently  found  out  of  order.  Compared 
with  other  types,  the  wear  is  great.  Never  good  for  more  than 
moderate  Hfts,  wear  soon  reduced  their  efficiency  in  this  and 
in  their  discharge. 

Though  perfected  in  design  and  capable  of  being  installed 
to  obviate  errors  of  location  and  power  transmission,  their 
somewhat  less  cost  does  not  make  them  effective  competitors 
and  comparatively  few  are  now  installed.  Even  where  the 
rotary  principle  is  desired  the  modern  turbine  centrifugal  pump 
can  usually  be  used  and  is  preferred,  especially  for  its  adaptability 
to  direct  connection  to  electric  motors,  which  the  slower  speed 
•of  rotary  pumps  usually  forbids. 

Turbine  centrifugal  fire  pumps  have  discs  bearing  curved 
vanes  revolving  at  high  speed,  imparting  to  the  water  a  high 
velocity  which  is  restrained  by  the  shape  of  the  passages  and 
appears  as  pressure.  Several  discs  are  arranged  on  the  same 
shaft,  each  in  a  separate  casing  with  suitable  water  passages 
to  the  next,  through  which  the  water  passes  in  series  receiving 
added  pressure  from  each  impeller  disc,  usually  about  45  pounds, 
such  being  a  ''multi-stage"  pump. 

Properly  built  they  are  simple,  durable,  not  easily  damaged. 
As  the  moving  parts  will  not  positively  displace  and  eject  the 
air  in  the  pump,  so  as  to  produce  a  high  vacuum,  the  pump 
will  not  lift  well  unless  it  and  its  suction  pipe  are  filled  completely 
with  water  —  primed,  as  the  phrase  is.  Thus  they  lack  a  quality 
possessed  by  a  rotary  in  good  condition  and  preeminently 
by  a  piston  pump  such  as  a  steam  fire  pump,  hence  their  location 
should  preferably  permit  water  to  flow  into  them,  sometimes 
difficult  to  arrange. 


":  82 

The  turbine  centrifugal  pump  is  the  latest.  It  is  not  yet 
widely  used,  perhaps  because  the  customary  combination  with 
electric  motor  drive  is  expensive,  the  required  arrangements 
for  satisfactory  supply  and  control  of  electrical  power  materially 
contributing  to  the  cost. 

The  most  used  and,  by  that  token,  the  best  adapted  type 
of  pump  for  general  use  for  fire  protection,  is  the  duplex,  steam, 
piston  pump.  Using  the  most  common  and  best  understood 
motive  power,  slow  speed,  positive  vacuum  producing  plungers, 
it  is  generally  found  in  repair,  durable,  and  prompt  in  action, 
having  more  advantages  than  any  other  at  but  Httle  more  cost 
than  the  present  type  rotary.  Where  steam  of  sufficient  volume 
and  pressure  is  available  this  pump  is  almost  invariably  chosen. 

One  of  its  comparative  advantages,  positive  suction,  is 
to  some  degree  neutralized  by  the  conservative  practice  of  making 
the  suction  of  any  fire  pump  short  and  with  a  limited  lift,  to 
avoid  the  difficulties  of  maintenance  of  long  lines  of  that  sort. 
A  very  small  leak  will  let  in  air  enough  to  prevent  the  pump 
from  drawing  and  a  settling  of  the  pipe  joints  may  cause  it. 

In  design  they  are  especially  provided  with  more  liberal 
passages  for  steam  and  water  than  ordinary  pumps,  are  heavier, 
better  fitted  to  resist  corrosion  and  will  give  a  higher  water 
pressure  at  a  given  steam  pressure  so  that  the  water  pressure 
will  be  effective  even  if  the  steam  is  low. 

Fire  pumps  of  all  types  are  commonly  made  in  500,  750  and 
1,000  gallon  per  minute  sizes  and  less  often  in  1,500  gallon  sizes, 
that  is  the  delivery  at  100  pounds  pressure  at  the  pump,  250 
gallons  per  minute  being  considered  a  standard  hose  stream. 

The  500  and  1,500  gallon  pumps  are  seldom  used.  The 
1,000  gallon  size  is  probably  most  common  and  such  a  steam 
pump  requires  about  150  horse  power  boiler  capacity  to  run 
it  right. 

Any  fire  pump  can  be  made  to  give  considerably  more 
than  its  rated  capacity  under  favorable  conditions,  but  the 
rating  shows  what  it  must  do  under  ordinary  service  conditions. 
All  must  have  those  parts  made  of  bronze  which  are  likely  to 
rust  and  be  designed  to  give  high  pressures  under  unfavorable 
conditions  without  much  regard  for  economy  of  operation. 
A  fire  pump  runs  comparatively  little  and  economy  is  not  the 
prime  consideration.  Yet  it  is  not  uncommon  to  see  a  fire 
pump  in  use  for  continuous  service  supply,  usually  a  wasteful 
procedure.  It  is  no  exaggeration  to  say  that  it  would  be  far 
more  economical  in  most  cases  of  this  kind  to  buy  a  service 
pump  better  designed  for  the  needs,  not  to  mention  the  advantage 
of  not  wearing  the  fire  pump  into  a  condition  of  ineffectiveness 
often  not  realized  until  urgent  need  demonstrates  it  too  late. 

With  all  types  it  is  necessary  to  be  careful  that  the  value 
of  the  pump  is  not  reduced  by  a  poor  arrangement  of  its  supply 
of  water,  steam,  electricity,  driving  shaft,  suction  and  discharge 


83 

mains,  and  this  must  be  carried  back  far  enough  to  see  that 
even  by  remote  causes  the  pump  is  not  vitally  affected.  Why 
throw  away  the  use  of  an  expensive  installation  because  the 
only  water  supply  to  the  boilers  comes  through  a  lightly  built 
or  hazardous  building  where  it  is  broken  down  early  in  a  fire 
or  because  an  exposure  fire  can  drive  men  away  from  pump  or 
its  sources  of  power?  These  illustrate  two  of  many  conditions 
that  must  be  considered. 

A  comparison  of  results  in  a  large  number  of  fires  has  been 
tabulated  according  to  the  nature  of  the  primary  water  supply, 
that  is,  the  supply  which  will  operate  first.  These  supplies 
were,  water  works,  2,961  fires;  gravity  tank,  1,938  fires;  pressure 
tank,  627  fires;  and  automatic  pump,  256  fires.  These  corre- 
spond to  the  sources  mentioned  herein,  except  that  of  the  pump 
which  in  the  comparison  is  limited  to  pumps  equipped  with 
regulators  so  as  to  start  automatically.  The  number  of  fires 
is  sufficient  to  give  reliable  results  in  each  case  for  most  obser- 
vations. 

The  percentages  of  fires  "extinguished,"  "held  in  check" 
and  "unsatisfactory"  are  nearly  the  same  for  the  water  works 
and  gravity  tank  even  though  the  average  pressure  was  66 
pounds  and  24  pounds  respectively.  Evidently  24  pounds 
average  pressure  was  enough.  The  pressure  tank  showed 
82.5%  extinguished,  18  to  20%  more  than  the  other  sources, 
the  average  pressure  91  pounds,  or  25  pounds  higher  than  any 
other.  Inferences  might  be  drawn  more  favorable  to  the  pressure 
tank  than  I  think  would  be  warranted.  Certainly  the  greater 
pressure  is  not  responsible  for  it  as  a  study  of  the  results  based 
on  relative  pressures  shows.  It  is  probably  due  to  the  more 
favorable  conditions  in  the  risks  in  which  pressure  tanks  are 
placed,  which  are  for  the  most  part  mercantile  or  light  manu- 
facturing risks  of  moderate  size,  good  construction  and  moderate 
hazard.  The  preSvSure  tank  has  the  lowest  percentage  of  "un- 
satisfactory fires,"  which  is  consistent  with  this  belief.  It  does 
show  without  doubt,  however,  that  pressure  tanks  have  been 
successful,  notwithstanding  the  difficulties  of  maintenance. 

The  automatic  pump  has  the  worst  record,  especially  in 
the  average  number  of  heads  opened  per  fire,  also  in  regard  to 
"unsatisfactory  fires,"  5.9%  against  3.4%,  3.9%  and  1.9% 
respectively  for  the  others,  but  the  element  of  chance  is  too 
great  in  this  on  account  of  the  small  number  of  automatic 
pump  fires. 

Grouping  according  to  pressures  which  averaged  for  the 
four  groups,  10,  19,  35  and  78  pounds,  respectively,  shows  the 
average  number  of  heads  opened  per  fire  to  be  7.39  (5,782  fires) 
with  only  small  variation  in  the  groups.  On  the  average  65.7% 
were  extinguished.  30.9%  held  in  check  and  32.3%  had  no  claim 
for  loss.     There  is  not  much  variation  from  the  average  except 


84 

that  the  lowest  pressure  group  shows  a  notably  larger  percentage 
of  "unsatisfactory"  fires  and  lower  percentage  of  "no  claim" 
fires,  consistently  indicating  a  warning  against  low  pressure. 

The  comparisons  as  a  whole  are  interesting  but  on  the  same 
general  basis  comparisons  should  be  made  for  several  groupings 
of  physical  conditions  and  hazards  of  occupancy.  The  low 
percentage  of  unsatisfactory  fires,  3.4%,  emphasizes  the  effi- 
ciency of  sprinkler  protection. 

A  common  emergency  water  supply  is  provided  for  in  the 
so-called  "steamer  connection"  which  is  a  fitting  projecting 
from  the  street  front  of  the  building  or  other  convenient  location, 
to  which  hose  lines  from  fire  engines  can  be  attached,  and  con- 
nected by  piping  to  the  system  inside  the  gate  valves,  so  that 
water  can  thus  be  introduced  even  if  the  gate  valves  admitting 
the  ordinary  supplies  happen  to  be  shut.  They  are  usually 
made  for  two  hose  lines  and  have  inside  a  check  valve  that 
shuts  off  the  idle  inlet  when  a  line  of  hose  is  attached  to  the 
other.  Being  close  to  the  sidewalk,  and  of  brass  as  good  as  gold 
in  any  junk  shop,  they  present  an  almost  irresistible  attraction 
to  needy  street  urchins  and  therefore  must  be  pinned  on  to  their 
pipe  connections  so  as  not  to  be  removable  with  tools  ordinarily 
obtainable. 

Unfortunately  there  has  been,  and  yet  remains  in  many 
places,  a  strong  objection  by  public  fire  departments  to  the  use 
of  steamer  connections.  There  is  no  sound  reason  for  this 
condition  and  it  is  changing.  The  Philadelphia  fire  depart- 
ment has  for  about  two  years  made  it  a  rule  to  take  the  first 
line  of  hose  into  the  building  and  to  connect  the  second  to  the 
steamer  connection  and  there  is  recognition  by  others,  but 
it  should  be  given  by  all  and  the  people,  who  pay  both  the  fire 
.losses  and  the  expense  of  fire  departments,  should  compel  it. 
One  line  of  hose  thus  connected  is  valuable  and  two  lines  can 
furnish  as  good  a  supply  as  the  best  that  many  systems  have 
and  the  sooner  they  are  connected  the  less  the  loss  will  be. 

In  the  larger  cities  there  are  sprinkler  equipments  in  base- 
ments only,  which  have  no  other  means  of  supply  than  hose 
connections  and  they  have  been  very  useful  in  controlling  in 
these  comparatively  inaccessible,  and  usually  crowded,  places. 

There  are  certain  types  of  sprinklers  which  are  not  automatic 
but  have  the  general  form  of  automatic  sprinklers  and  are 
attached  to  piping  in  the  same  way,  but  have  deflectors  of  a 
special  shape  according  to  their  uses.  Such  are  the  cornice  and 
window  sprinklers  placed  outside  these  to  prevent  cornice  or 
other  combustible  exterior  trimming  from  igniting  and  windows 
from  breaking  from  the  heat  of  an  exposure  fire.  On  the  old 
pitched  wooden  roofs  it  is  quite  customary  to  place  a  row  of 
open  sprinklers  along  the  ridgepole  and  it  is  obvious  how  much 
better  that  is  than  the  older  arrangement  of  depending  on  the 
services   of   men    with   buckets   clambering   precariously   along 


85 

a  narrow  ridgepole  walk.  A  unique  use  of  open  sprinklers  was 
to  place  them  along  the  top  of  a  rather  high  board  fence  next 
a  lumber  yard,  as  protection  against  the  lumber  yard  exposure. 

A  cornice,  wall  or  window  sprinkler  has  a  deflector  shaped 
to  throw  all  the  water  towards  the  building.  These  outside 
sprinklers  must  be  turned  on  as  needed  for  water  cannot  be 
kept  in  the  pipes  on  account  of  cold.  They  cannot  be  readily 
replaced  and  therefore  they  are  permanently  open.  They  are 
piped  in  sections  so  laid  out  as  to  avoid  the  necessity  of  turning 
on  any  more  than  are  necessary.  In  order  to  equalize  the  dis- 
charge to  just  enough  for  efficiency  at  the  elevation  where 
the  sprinkler  is  located,  they  have  orifices  which  are  largest 
for  sprinklers  at  the  top,  three  sizes  in  all,  and  because  there 
is  no  need  for  so  much  water  as  from  inside  sprinklers  which 
must  distribute  the  water  on  all  sides,  the  largest  orifice  in 
open  sprinklers  is  smaller  than  that  of  the  automatic  sprinkler 
and  in  the  smallest  size  only  one-quarter  the  area. 

The  piping  supplying  open  sprinklers  is  run  nowadays 
inside  the  buildings  so  far  as  possible,  with  branches  extended 
through  the  window  caps  or  walls.  This  puts  the  fittings  where 
they  are  accessible  and  avoids  the  exposure  of  the  piping  to 
the  elements  so  far  as  possible. 

One  of  the  worst  foes  to  open  sprinklers  is  scale  and  rust 
from  the  inside  of  the  pipe,  which  washes  into  the  head  and  stops 
the  orifice,  and  this  is  the  principal  reason  why  galvanized  pipe 
is  required.  It  is  not  uncommon  to  have  several  heads  in  a 
vSection  suddenly  choked  up  by  this  or  similar  material. 

In  operation  with  an  ample  water  supply  a  curtain  of  water 
is  poured  down  which  very  effectively  protects  the  windows 
and  other  exposed  parts  of  an  ordinary  brick  building  and  in 
combination  with  wired  glass  windows  makes  exceptionally 
good  protection.  They  have  one  serious  limitation,  that  they 
must  be  turned  on  by  hand,  which  does  not  amount  to  much 
when  the  risk  is  in  operation,  but  which  is  important  at  night 
with  no  one  at  hand  and  at  such  times  fire  has  broken  into  a 
risk  from  neglect  to  turn  on  the  open  sprinklers.  For  this  reason 
especially  the  public  fire  departments  should  be  made  famiUar 
with  the  existing  open  sprinkler  systems  so  that  they  will  be 
properly  handled  at  all  times. 

When  the  water  supply  is  good,  open  sprinklers  will  keep 
ordinary  window  glass  from  breaking  and  make  a  good  barrier 
against  exposure  fires,  but  to  be  sure  of  this  requires  a  first  class 
water  supply,  so  many  sprinklers  must  be  open  at  once.  One 
of  the  best  examples  of  these  principles  was  the  Kilgore  factory 
at  Toronto  against  which  the  conflagration  beat  in  vain.  The 
exposure  was  close  and  so  fierce  that  the  face  of  the  brick  work 
was  scarred  noticeably  yet  hardly  any  window  glass  was  broken 


86  ' 

in  the  lower  stories  though  the  fire  did  get  in  at  the  top  because 
the  water  pressure  was  not  enough  to  give  good  open  sprinkler 
service  there,  which  was  the  only  protection  the  windows  had. 

On  account  of  the  large  amount  of  water  required  because 
so  many  open  sprinklers  must  be  turned  on  at  once,  pressure 
tanks  are  never  connected  to  them  and  gravity  tanks  only  when 
large  increased  capacity  has  been  provided  for  that  special 
reason. 

There  are  no  machines  that  require  so  little  attention  as 
a  sprinkler  system  yet  it  will  not  do  at  all  to  assume  that  it 
can  be  forgotten  after  it  is  installed.  Having  acquired  a  sprinkler 
equipment,  there  are  lots  of  "dont's"  for  the  owner  to  observe 
which  are  new  to  him,  and  more  of  the  troubles  of  maintenance 
are  caused  by  omissions  than  by  direct  damage. 

One  of  the  most  difficult  things  to  impress  upon  many  is 
that  the  value  of  a  properly  installed  system  may  be  seriously 
affected  if  subsequently  obstructions  be  put  up,  such  as  hanging 
shelves,  large  benches  and  continuous  tables,  partitions,  ceilings, 
unless  the  sprinkler  system  is  extended  into  the  sheltered  spaces 
thus  formed. 

Another  fault  is  the  coating  of  the  heads  with  paint,  bronz- 
ing or  whitewash  used  in  finishing  the  building  or  the  pipes. 
Especially  is  this  Hkely  to  happen  when  the  material  is  applied 
with  an  air  brush,  as  is  often  the  case  with  whitewash.  Then 
it  is  necessary  to  put  little  bags  over  the  heads  temporarily 
and  sometimes  the  bag  is  on  a  pole  held  by  one  man  while  the 
other  sprays.  These  or  any  other  coating  on  the  movable  parts 
may  cause  the  sprinkler  to  stick  fast. 

The  solder  of  sprinklers  is  vitally  subject  to  corrosion 
from  acid  and  other  fumes,  most  rapidly  in  damp  places.  This 
is  also  true  of  piping.  It  is  necessary  in  such  places  to  anticipate 
serious  corrosion  by  replacing  the  damaged  equipment  as  neces- 
sary, even  when  every  means  of  protection  was  originally  adopted. 
Sprinklers  are  coated  with  ozokerite  by  the  makers,  which 
will  protect  them  for  a  greater  or  less  time,  but  this  will  finally 
get  displaced.  This  is  the  "corroproof"  head.  Another  method 
used  is  to  place  a  glass  cup  over  the  head  sealing  it  at  the  base 
with  a  soft  grease.  It  is  astonishing  how  soon  such  a  head  will 
open,  in  the  test  oven,  only  requiring  a  half  more  time  than  a 
bare  sprinkler.  In  practice,  however,  not  many  are  so  installed. 
The  piping  in  dye  houses  is  apt  to  be  actively  corroded  and  in 
such  places  as  the  nitrating  room  of  a  gun  cotton  factory  or  the 
blow  tank  room  of  a  sulphite  mill  it  is  almost  impraticable 
to  maintain  an  operative  sprinkler  system  on  account  of  corrosion. 
Painting  the  pipe  with  a  good  inert  paint  or  varnish  mixture  which 
contains  nothing  that  can  attack  the  pipe  will  go  far  towards 
its  preservation,  repainting  as  needed,  and  such  special  paints 


87 

are  sold.  There  are  locations  where  it  has  been  found  necessary 
to  use  brass  pipe,  but  this  is  so  expensive  as  to  be  the  infrequent 
exception. 

Drawing  water  for  service  from  some  part  of  the  sprinkler 
system  has  caused  a  great  deal  of  trouble.  First,  it  brings  in 
sediment  or  substances  in  solution  in  the  water  which  in  time 
reduce  the  area  or  even  stop  up  the  waterway  entirely  and, 
second,  it  is  the  principal  reason  why  water  works  authorities 
sometimes  refuse  to  permit  a  connection  to  a  fire  system  without 
a  meter,  most  types  of  which  offer  considerable  obstruction  to 
flow  and  any  of  which  are  likely  to  be  installed  without  suitable 
provision  for  the  continuance  of  the  water  service  when  the 
meter  has  to  be  removed  for  repairs. 

In  all  plants,  but  particularly  in  those  where  internal 
changes  are  common,  there  is  danger  that  the  men  engaged  in 
such  work  will  without  notice  to  the  executives  disconnect  a 
sprinkler  pipe  which  inconveniences  them  or  close  a  valve  or 
both.  This  will  put  out  of  service  from  one  head  up  to  an  entire 
system.  Too  often  they  forget  to  open  the  valve  even  if  they  do  not 
forget  to  reconnect  the  pipe.  Superintendents  and  managers 
should  watch  out  for  these  things  and  make  it  a  practice  to  see 
that  all  sprinklers  are  put  in  commission  again  without  delay. 
If  there  is  a  master  mechanic  or  piper  he  should  be  made  respon- 
sible for  these  things. 

When  sprinklers  open  for  any  cause,  it  is  necessary  to 
replace  them  with  new  ones  as  soon  as  proper,  otherwise  even 
one  head  may  cause  careless  delay  in  putting  a  whole  system  in 
commission.  It  would  take  three  or  four  days  at  least  to  procure 
sprinklers  at  many  a  small  town  and  even  though  the  outlets 
could  in  such  case  be  plugged  and  the  water  turned  on,  the 
tendency  is  to  wait  for  the  sprinklers.  Moreover,  to  plug  the 
outlets  means  they  are  likely  to  be  left  so.  I  once  found  an 
entire  blind  attic  system  left  with  plugged  outlets.  There  are 
emergency  stops  manufactured  which  can  be  put  into  a  sprinkler 
which  has  opened  so  that  the  water  can  be  turned  into  the 
system  without  delay  and  at  least  one  is  made  with  a  solder 
joint  so  as  to  approximate  the  link  which  it  temporarily  replaces. 
To  obviate  these  troubles  it  is  required  to  keep  on  hand  at  least 
a  half  dozen  new  sprinklers,  so  that  replacement  may  be  made 
immediately  and  it  is  always  necessary  to  be  careful  not  to  select 
a  sprinkler  of  the  wrong  fusing  point  for  that  place.  Note 
here  a  reason  why  the  fusing  temperature  of  a  sprinkler  is  cast 
on  the  frame  even  though  it  is  likewise  marked  on  the  link. 
Without  the  figures  on  the  frame  it  could  not  be  told  with  cer- 
tainty what  was  the  fusing  point  of  the  sprinkler  which  opened, 
for  the  links  flew  out  and  were  swept  out  with  the  water  and 
rubbish  and  even  if  they  were  found,  they  could  not  be  identified 
as  belonging  to  any  particular  sprinkler,  assuming  several 
opened. 


88 

The  danger  of  freezing,  especially  in  the  main  supplies, 
must  be  safeguarded  and  it  is  not  safe  to  assume  that  this  danger 
is  absent  if  the  installation  was  originally  safe.  Although  freezing 
frequently  occurs  inside  buildings  because  of  carelessness  with 
windows  or  heating  service  on  suddenly  bitter  cold  nights  or 
week  ends,  it  is  usually  only  a  small  number  of  sprinklers  that 
is  affected  and  leakage  calls  prompt  attention,  but  when  freezing 
occurs  in  a  main  underground  or  elsewhere  out  of  sight,  the 
temperature  may  not  warm  up  again,  as  it  would  inside  a  building, 
for  weeks  and  the  main  may  remain  plugged  with  ice  and  the 
system  useless.  There  is  one  well  known  instance  of  a  total 
loss  of  $250,000  from  just  such  conditions.  A  carelessly  filled 
trench  may  settle,  the  grade  may  be  subsequently  cut  down 
too  much  on  a  bank,  for  instance,  porous  fill  may  be  used,  the 
pipe  may  be  run  with  too  little  protection  over  the  arch  of  a 
tail  race  or  culvert  where  the  depth  of  earth  is  shallow  and  cold 
comes  both  from  above  and  below.  Remember  that  a  fire 
main  has  no  circulation  and  therefore  the  water  in  it  will  freeze 
where  it  would  not  in  a  service  pipe. 

There  is  one  disadvantage  of  a  sprinkler  equipment,  which 
is  the  possibility  of  water  damage  from  accidental  leakage  or 
discharge  from  it.  Where  there  are  so  many  pipes  and  sprinklers 
distributed,  it  is  not  surprising  that  the  sprinklers  occasionally 
break  from  defects  of  manufacture,  the  overheating  of  the  room, 
blows,  corrosion,  freezing,  and  that  the  pipes  should  break  from 
settling,  overloading  the  building,  and  other  causes.  The  tanks 
fall,  sometimes  doing  great  damage.  Freezing  is  the  most 
common  cause  of  trouble  and  it  occurs  all  over  this  country 
except  where  it  never  gets  cold  enough  to  freeze,  even  in  parts 
of  the  southern  states.  In  bitter  cold  weather  pipes  of  all 
sizes  are  burst  by  frost  and  heavy  losses  occur. 

When  freezing  occurs  it  very  often  shows  by  bursting  a 
fitting,  blowing  out  a  piece  of  it.  All  sizes  burst,  even  the  princi- 
pal mains. 

Considerable  comment  on  leakage  has  been  made  by  people 
without  experience,  claiming  that  it  occurs  comparatively  seldom 
and  is  trivial.  This  is  not  at  all  true  of  the  general  sprinkler  leak- 
age business. 

About  all  the  sprinkler  contractors  carry  insurance  against 
sprinkler  leakage  for  which  they  may  be  liable  as  a  result  of 
work  they  have  done  on  the  system  and  many  owners  and  tenants 
of  sprinkled  risks  insure  against  leakage  on  their  own  account. 

The  policy  contracts  are  standardized  and  the  business  is 
rated  according  to  the  physical  conditions  that  affect  leakage 
which  are  not  as  a  rule  the  same  that  affect  fire  insurance. 

Usually  the  assured  carries  10%  insurance  to  value  and 
in  this  section  there  is  as  yet  no  provision  for  greater  than  30% 
co-insurance. 


89 

The  conditions  that  predispose  to  sprinkler  leakage  can  be 
recognized  by  an  expert  and  as  a  rule  the  assured  is  willing  to 
remedy  the  trouble.  The  principle  bureaus  in  this  section  of 
the  country  now  consider  these  things  in  connection  with  their 
regular  surveys  and  report  recommendations. 

It  is  quite  common  to  break  open  a  sprinkler  by  an  acci- 
dental blow.  To  prevent  this  guards  are  made  which  can  be 
slipped  over  the  sprinkler  for  protection.  These  devices  are 
now  being  submitted  to  the  Laboratories  for  approval  and  some 
have  been  approved  but  there  are  some  that  are  badly  designed 
so  that  in  certain  positions  the  links  of  the  sprinkler  catch  on 
the  frame  of  the  guard  and  the  sprinkler  will  not  open.  The 
safest  remedy  is  to  buy  only  approved  guards. 

It  was  trouble  from  sprinkler  leakage  in  a  dry  system  that 
caused  us  to  investigate  the  formation  of  ice  in  dry  systems 
and  resulted  in  the  development  of  very  interesting  information, 
which,  however,  is  not  yet  exhaustive. 

If  the  temperature  drops  below  freezing  in  a  wet  system 
everybody  understands  that  there  is  water  in  the  pipes  which 
will  freeze,  but  it  is  not  commonly  considered  that  there  may 
be  water  in  a  dry  pipe  system  which  will  freeze  and  either  burst 
or  plug  up  the  pipes,,  but  this  is  often  the  case. 

Theoretically  the  dry  pipe  system  contains  only  compressed 
air  and  is  therefore  safe  to  use  in  cold  locations.  Actually  water 
gathers  in  it  and  freezes  and  although  the  writer  has  no  desire 
to  pose  as  an  alarmist,  it  is  a  fact  that  the  actual  condition 
of  a  dry  system  in  cold  places  is  seldom  known  and  is  difficult 
to  ascertain  and  there  is  more  interruption  to  service  in  parts 
of  the  system  than  is  generally  believed. 

Water  gets  into  a  dry  system  in  three  ways.  It  is  purposely 
introduced  on  top  of  the  dry  valve  to  seal  the  air  valve,  it  is 
carried  in  very  small  quantities  as  moisture  in  suspension  in 
the  air  put  in  by  the  air  pump  used  to  keep  up  the  desired  pressure 
and  it  gets  in  if  the  valve  trips. 

It  does  not  require  much  water  in  a  system  to  block  up 
a  pipe  because  ice  formed  by  the  gradual  deposit  from  the  freez- 
ing of  moisture  carried  in  the  air  is  not  solid  but  cellular  and 
it  is  estimated  that  it  occupies  about  twelve  times  as  much  volume 
as  the  water  which  it  would  form  if  melted,  but  it  is  an  effective 
plug,  nevertheless.  This  is  to  say  that  such  ice  from  one  gill 
of  water  —  about  half  a  glassful  —  would  fill  a  3-inch  pipe  for 
12}4  inches  of  its  length.  Any  water  in  a  system,  even  the 
priming  water,  may  be,  and  probably  in  most  cases,  is  picked 
up  as  moisture  in  the  comparatively  warm  dry  valve  and  rises 
till  it  comes  to  a  place  cold  enough  to  cause  the  air  to  be  unable 
to  carry  some  of  it  and  that  which  is  deposited  freezes.  This 
action  is  probably  favored  by  the  practice  of  connecting  at  the 
dry  valve  the  pipe  from  the  air  pump  and  this  air  may  not 
have  cooled  very  much  after  compression  which  heats  it.     In 


90 

every  dry  system  there  are  differences' of  temperature,  at  least 
between  the  dry  valve  which  must  be  kept  above  freezing  and 
is  usually  75°  or  more,  and  the  rest  of  the  building  which  may 
be  very  cold.  In  a  cold  storage  building  there  will  be  several 
different  temperatures,  down  to  0°F.  sometimes.  Where  the 
warm  moisture  laden  air  strikes  the  colder  place  is  where  the 
ice  forms  in  this  way,  especially  where  the  sprinkler  pipe  is  in 
contact  with  refrigerating  pipes,  and  it  starts  as  a  ring  on  the 
inner  surface  of  the  sprinkler  pipe  and  in  the  course  of  time 
becomes  a  complete  plug.  How  long  it  requires  we  do  not  know, 
but  must  find  out  by  taking  down  piping  at  different  places 
known  to  have  been  free  of  ice  at  a  certain  time,  and  observing 
the  condition  again  after  definite  periods.  Possibly  somebody 
will  insert  a  section  of  glass  pipe  through  which  the  action  can 
be  observed  without  disconnecting. 

We  know  this,  that  such  stopping  of  3"  and  4"  pipes  will 
take  place  in  the  winter  in  an  ordinary  dry  system.  To  prove 
this  and  also  that  the  moisture  laden  air  does  act  as  described, 
we  have  record  of  the  following  occurrence:  At  a  large  edge 
tool  plant  the  sprinkler  system  was  in  charge  of  a  careful  and 
inteUigent  man  who  was  in  the  habit  of  making  daily  readings 
of  the  outdoor  temperature  and  of  the  pressure  gauges  on  the 
systems.  On  one  occasion  he  noted  a  heavy  drop  in  temperature 
but  accompanied  on  one  system  by  a  considerable  increase 
in  gauge  pressure,  which  he  knew  was  inconsistent.  He  took 
apart  the  riser  just  outside  the  dry  valve  closet  and  found  it 
filled  with  ice  which  had  undoubtedly  been  gradually  forming, 
the  last  aperture  having  been  closed  by  the  ice  formed  the  night 
before.  The  riser  at  this  point  was  vertical  and  ice  could  have 
formed  there  under  the  conditions  found  only  by  the  freezing 
of  moisture  from  the  air. 

If  the  piping  of  a  dry  system  is  not  arranged  to  drain  back 
to  the  drip  pipes,  either  because  it  is  not  installed  properly 
or  because  the  piping  gets  out  of  line  afterward,  water  admitted 
will  in  part  remain  in  the  low  places,  to  freeze.  Lightly  built 
structures  or  those  which  have  varying  and  heavy  loads  are 
very  apt  to  have  this  trouble  and  a  dry  system  in  such  is  not 
as  good  a  protection  as  in  substantial  buildings  which  cannot 
change  level  from  loads  due  to  the  contents,  and  in  which  also 
there  is  less  trouble  from  leakage  of  air. 

In  systems  where  it  is  hard  to  keep  up  the  air  pressure,  , 
the  dry  valves  are  apt  to  trip  because  the  air  pressure  gets  too 
low  and  water  enters.  If  there  are  any  troubles  like  those  just 
discussed  some  of  the  water  remains  and  the  more  often  a  valve 
trips  the  more  chance  of  this  there  is.  Even  in  a  normal  system 
all  the  water  will  not  drain  out  at  once,  probably  because  of 
adhesion  to  the  pipe  and  water  can  be  obtained  at  successive 
drainings  for  several  days. 


91 

The  water  introduced  as  moisture  in  the  air  from  the  air 
pump  is  very  Httle,  though  in  the  course  of  time  appreciable. 
It  is  the  least  of  the  causes  contributing  to  the  formation  of 
ice  in  a  dry  system.  The  net  increase  in  the  water  introduced 
into  a  system  of  500  heads  in  pumping  up  the  air  pressure  from 
35  pounds  to  45  pounds,  the  temperature  outside  75°  F.,  hygrom- 
eter reading  85°  and  the  temperature  inside  the  system  32° 
is  .0066  gallons  and  ordinarily  the  conditions  would  be  such  that 
less  water  would  be  introduced.  In  other  words  the  air  would 
have  to  be  pumped  up  100  to  150  times  to  put  in  as  much  water 
as  is  to  be  found  normally  on  top  of  the  dry  valve,  which  would 
ordinarily  require  a  period  of  about  that  number  of  weeks  in 
a  system  in  average  condition  of  tightness. 

So  far  as  yet  discovered  no  sure  cure  for  this  ice  formation 
has  been  discovered.  It  is  always  advisable  to  take  air  for  the 
compressor  from  a  dry,  cold  place  instead  of  from  the  engine 
room,  as  is  common,  and  it  would  be  a  help  to  pass  it  through 
a  drip  chamber  with  baffle  plates,  located  in  a  cold  room.  The 
moisture  can  be  removed  by  passing  air  through  calcium  chloride 
but  it  is  not  often  done  and  I  feel  that  nothing  like  the  theoretical 
possibilities  will  be  continuously  attained  in  ordinary  practice. 
It  might  help  to  connect  the  air  pipe  into  the  system  at  a  distance 
from  the  dry  valve. 

When  Parmelee  invented  his  system  one  of  the  things 
he  sought  to  do  was  to  make  it  serve  also  for  heating  and  he  made 
some  experiments  with  sprinklers  placed  on  U  shaped  branch 
pipes  so  the  heat  from  the  main  would  not  open  them.  Appar- 
ently little  practical  use  was  made  of  this  method. 

About  six  years  ago  a  large  southern  corporation  put  the 
same  idea  into  use,  not  so  much  for  the  heating  effect  as  to 
obviate  the  necessity  for  using  dry  systems  or  shutting  off  cold 
sections,  and  they  warmed  the  water  by  putting  it  through  an 
injector  which  also  served  as  a  circulating  pump,  regulation 
of  circulation  being  governed  by  small  holes  in  diaphragms 
in  connections  made  to  the  ends  of  sprinkler  lines.  So  far  as 
the  writer  knows  the  heads  were  screwed  directly  into  the 
pipes  in  the  usual  way  and  some  were  opened  by  excess  heat. 
Apparently  no  use  of  this  arrangement  was  made  by  others. 

In  1912,  Pierce  Brothers,  Ltd.,  New  Bedford,  Mass.,  put 
into  their  weave  shed  a  combined  heating  and  sprinkler  system 
in  which  hot  water  was  made  to  circulate  through  the  pipes,  the 
sprinklers  being  placed  on  horizontal  branch  pipes  about  10 
inches  long  parallel  above  the  main  and  connected  to  it  by  a 
short  nipple.  With  the  same  plan  a  few  other  plants  have  been 
equipped. 

Somewhat  later  the  Combined  Heat  and  Sprinkler  Company 
of  Boston,  took  up  the  business  and  a  limited  number  of  plants 
were  equipped  under  licensing  arrangements  made  by  them  with 


92 

the  sprinkler  companies,  as  the  former  company  did  not  install 
the  systems,  twelve  or  more  having  been  equipped.  Litigation 
over  the  patent  rights  developed. 

The  object  of  the  plan  is  to  make  the  sprinkler  system  also 
do  the  heating,  but  in  buildings  of  the  usual  construction  and 
relative  wall  and  window  areas  it  is  necessary  to  install  auxiliary 
heating  coils,  which  would  not  always  be  necessary.  The  argu- 
ment in  favor  of  the  system  is  a  less  cost  than  that  of  a  hot  water 
heating  system  and  a  sprinkler  system  installed  separately, 
the  hot  water  heating  being  more  economical  of  fuel  than  steam 
and  less  subject  to  variation.  The  cost  comparison  with  steam 
heating  is  not  so  favorable  to  the  combined  system  though  it 
is  said  that  even  against  steam  it  can  make  good  showing. 
Probably  the  cost  argument  is  better  for  the  combined  system 
with  large,  wide  buildings  than  with  smaller  ones. 

The  sprinkler  system  is  installed  and  operated  the  same  as  an 
ordinary  system  so  far  as  fire  protection  is  concerned.  With 
the  combined  system  dry  systems  are  alike  impracticable  and 
unnecessary.  There  are  some  special  details  required,  however, 
each  sprinkler  being  attached  to  a  curved  pipe  from  a  horizontal 
outlet  of  the  tee,  this  pipe  being  curved  down  below  the  supply 
pipe  and  then  brought  up  higher  than  the  same  to  the  head. 
This  downward  curve  or  trap  in  the  branch  effectively  stops 
circulation  therein  and  prevents  the  heating  of  the  sprinkler 
which  in  most  cases  undoubtedly  has  air  in  the  pipe  directly 
beneath,  though  this  is  not  essential.  Following  the  curve  of 
the  branch  pipe  this  is  about  18  inches  long  with  which  a  tem- 
perature of  238°  F.  was  maintained  in  the  supply  main  without 
raising  the  temperature  of  the  sprinkler  above  100°  F.  which 
was  only  14°  higher  than  the  temperature  of  the  room.  The 
water  in  the  curve  of  the  branch  pipe  cannot  be  drained  out 
through  the  system  but  it  has  been  frozen  there  without  damage 
to  the  pipe  as  there  is  no  cast  iron  fitting  where  the  ice  can 
split  it- 

To  provide  for  heating,  a  hot  water  heater  is  put  into  the 
lowest  part  of  the  building,  often  a  steam  heated  drum  with 
tubes  through  which  the  water  passes,  the  water  is  forced  through 
it  by  a  small  centrifugal  pump  if  any  aid  to  circulation  is  neces- 
sary, though  in  ordinary  cases  no  pump  is  needed.  The  water 
from  the  heater  is  discharged  into  a  hot  water  riser  that  is  con- 
nected by  branch  piping  to  the  ends  of  all  the  sprinkler  lines 
usually  in  groups  of  three  or  four  with  a  valve  operated  by  a  key  • 
for  each  group  so  that  the  circulation  can  be  regulated  as  need 
be.  The  main  riser  serves  as  the  hot  water  return  pipe  to  the 
heater.  There  is  a  separate  riser  and  return  for  the  auxiliary 
system. 

No  expansion  tank  is  now  used  but  a  relief  valve  is  provided 
near  the  heater  and  to  supply  water  as  needed  on  account  of 
the  very  gradual  contraction  on  cooling,  without  causing  any 


93 

movement  of  the  alarm  valve,  a  small  by  pass  is  put  in  around 
the  alarm  check  containing  a  union  with  a  diaphragm  having 
a  j%-inch  hole.  The  by  pass  contains  also  a  hand  valve  and  if 
necessary  a  small  meter.  The  main  supply  valve  to  the  sprinkler 
system  controls  the  entire  water  supply  as  in  an  ordinary  system. 

The  circulating  pipe  connecting  the  ends  of  the  sprinkler 
lines  serves  to  cause  the  sprinklers  to  be  fed  from  both  directions 
and  thus  cuts  down  friction  loss,  subject  to  the  qualification 
that  the  circulating  valves  in  these  pipes  may  be  partly  closed. 

The  questions  that  this  combined  system  raises  are  several. 
The  natural  one  whether  sprinklers  ma}^  not  occasionally  be 
opened  by  the  heat  of  the  system  appears  to  be  settled  in  the 
negative  for  ordinary  conditions  where  the  proper  forms  of 
offset  branches  to  the  sprinklers  are  used  as  apparently  is  now 
done.  The  earliest  forms  did  permit  a  few  such  accidents. 
Nevertheless  the  matter  is  not  conclusively  settled  yet  because 
the  field  experience  has  not  been  sufficient.  Whether  a  sprinkler 
located  in  a  closed  un ventilated  space,  like  the  top  of  a  small 
closet,  yet  on  a  pipe  where  the  needs  outside  demand  circulation 
of  water  at  220°  F.,  may  not  be  opened  by  the  heating  of  the 
air  in  that  confined  space  even  if  not  directly  from  the  heat  in 
the  offset  pipe,  is  to  my  mind  an  open  question.  A  few  cases 
of  bursting  from  freezing  have  been  reported,  due  to  improper 
regulation  of  circulation  and  faulty  installation.  Such  accidents 
might  result  in  sprinkler  leakage  loss.  A  test  with  water  in 
the  pipes  at  210°  gave  the  temperature  of  the  spray  close  to 
the  head  as  100°  F.,  and  five  feet  away  it  felt  only  lukewarm 
to  a  bald  headed  man  who  volunteered  to  try  it. 

The  use  of  the  combined  system  to  take  the  place  of  the 
dry  pipe  system  with  its  doubt  and  complication  would  be  a 
good  thing,  but  least  likely  to  take  place  because  from  the  con- 
ditions those  places  do  not  require  heating. 

The  system  offers  an  easy  way  to  avoid  the  necessity  for 
shutting  off  sprinklers  in  some  sections  of  an  elsewhere  warm 
building  of  which  there  are  many  such,  too  small  to  be  considered 
worthy  of  a  dry  valve,  yet  constituting  a  greater  or  less  menace 
to  efficient  protection,  as  well  as  the  means  of  obviating  a  dry 
valve  in  larger  sections  where  it  would  unquestionably  be 
supplied.  The  temperature  in  such  places  can  be  regulated, 
by  controlling  the  circulation,  to  no  -more  than  the  conditions 
need,  therefore  at  the  least  possible  maintenance  expense. 

There  is  said  to  be  no  trouble  from  the  deposit  of  sediment 
and  it  is  reasonable  to  expect  that  there  would  be  no  more  than 
has  been  surmounted  in  hot  water  heating  systems,  though 
there  are  likely  to  be  places  where  special  consideration  would 
have  to  be  given. 

It  is  a  question  whether  the  convenience  of  drawing  hot 
water  from  the  system  for  some  minor  purpose  might  not  be 
a  temptation  to  make  a  connection  which  would  not  be  done 


94 

with  an  ordinary  cold  water  system,  resulting  in  the  unseating 
of  the  alarm  valve  with  the  tendency  to  cause  false  alarms 
from  leakage  due  to  grit  consequently  deposited  on  the  seat. 

Taking  everything  into  consideration  it  appears  that  the 
combined  system  has  a  field  which  has  not  yet  been  developed, 
but  which  is  up  to  this  time  developing  slowly. 

The  remarkable  efficiency  of  automatic  sprinklers  as 
ordinarily  installed  and  particularly  the  control  of  fires  with 
few  sprinklers,  has  caused  suggestions  from  time  to  time  that 
a  sprinkler  system  piped  as  usual  should  be  fed  with  some 
limited  inexpensive  single  water  supply  but  to  receive  reduction 
in  rate.  One  man  suggested  only  a  steamer  connection  supply, 
another  only  a  little  electrical  pump. 

This  idea  has  now  been  introduced  with  the  supply  from 
a  chemical  extinguisher  tank,  which  operates  automatically. 
It  is  called  the  "Sypho  Chemical  Automatic  Sprinkler  System." 

The  only  supply  is  a  chemical  extinguisher  tank,  either 
100  or  200  gallon  capacity,  and  on  account  of  the  limited  capacity 
it  is  admittedly  expected  only  to  take  care  of  those  fires  which 
can  be  handled  by  not  more  than  three  sprinklers  operating 
not  over  five  minutes.  In  order  to  limit  the  installation  to  those 
risks  which  are  fitted  for  it  as  well  as  to  insure  proper  supervi- 
sion, refilling  and  maintenance  it  is  to  be  leased,  not  sold.  It 
is  understood  that  the  prominent  sprinkler  companies  will 
have  the  privilege  of  putting  in  the  system,  which  is  a  proprie- 
tary one. 

Its  owners  argue  that  it  will  have  a  wide  field  especially 
in  mercantile  and  light  manufacturing  risks  of  moderate  value 
and  that  its  usefulness  will  be  greater  than  the  statistics  of 
"one  sprinkler"  fires  indicate.  They  say  that  the  published 
percentage  of  fires  extinguished  by  one  sprinkler,  30%,  is  much 
too  low  for  the  results  they  will  attain  with  one  head,  because 
it  was  obtained  from  all  sorts  of  risks,  good,  bad,  and  indifferent, 
whereas  their  risks  will  be  selected,  and  because  many  one 
sprinkler  fires  are  not  reported  on  account  of  their  insignifi- 
cance. There  is  logic  in  both  contentions.  As  yet  very  few 
installations  have  been  made  but  it  is  expected  their  installa- 
tion will  soon  become  general. 

On  account  of  the  assumption  that  this  is  only  a  "one  or 
two  sprinkler  fire"  system,  the  piping  is  much  smaller  than  in 
a  regular  system,  being  nowhere  more  than  2  inch  and  that 
the  riser.  The  pipes  will  be  run  and  heads  distributed  as  in 
the  ordinary  way  and  as  the  syphon  action  and  the  small  capacity 
of  the  supply  require  the  system  to  be  always  completely  filled 
with  liquid  to  avoid  trouble  from  freezing  they  will  be  filled  with 
calcium  chloride  solution,  which  the  advocates  say  will  not 
cause  trouble  from  corrosion  or  otherwise.  The  ends  of  all 
the  sprinkler  lines  will  be  connected  by  small  piping  as  the  system 
must  be  filled  completely  without  air  pockets,  since  the  auto- 


95 

matic  action  of  the  extinguisher  tank  depends  on.  the  siphoning 
action  of  the  partial  vacuum  produced  by  the  fall  of  level  of 
the  liquid  in  the  system  when  a  sprinkler  opens  and  the  expansion 
of  air  might  prevent  it. 

The  riser  is  carried  up  about  eight  feet  above  the  highest 
sprinkler  to  a  small  cylinder  with  a  gauge  glass  and  from  the 
top  of  this  cylinder  a  small  pipe  leads  down  to  the  siphon  from 
the  acid  container  in  the  extinguisher  so  that  the  flow  of  acid 
may  be  started  by  that  means.  Ingeniously,  the  acid  feed  is 
shut  off  by  increase  of  pressure  which  is  thus  maintained  quite 
constant  and  a  neutral  solution  is  secured  which  guards  against 
damage  from  excess  of  acid.  The  only  gate  valve  in  the  system 
is  devised  so  it  cannot  be  closed  except  when  the  pressure  is 
on  and  it  is  expected  at  such  a  time  that  nobody  will  be  likely 
to  touch  it  except  someone  familiar  with  the  system. 

By  the  action  of  the  operating  pressure  on  diaphragms 
an  electric  bell  alarm  and  a  mechanical  water  motor  alarm  may 
be  rung  as  long  as  the  extinguisher  is  operating  and  the  pressure 
is  so  high,  about  150  pounds,  that  there  is  little  chance  of  the 
alarm  contacts  failing  to  operate.  There  is  no  chance  of  false 
alarm.  None  of  the  contents  of  the  supply  tank  is  used  to 
operate  the  alarm. 

By  actual  test  with  a  100  gallon  tank  one  sprinkler  dis- 
charges effectively  about  6  minutes  and  two  sprinklers  about 
43^  minutes.  Probably  the  pressure  in  the  piping  is  a  little 
lower  with  two  operating.  In  a  small  frame  shanty  it  puts  out 
fires  in  a  considerable  quantity  of  very  combustible  material. 
Of  course  the  room  is  small,  and  there  are  no  obstructions. 
Undoubtedly  the  system  has  merit,  but  the  degree  remains 
to  be  established. 

On  account  of  the  necessity  of  filling  the  system  with  the 
proper  solution  to  the  top  quite  exactly  and  charging  the  extin- 
guisher tank  properly,  it  will  not  be  sold,  but  leased  and  super- 
vised. It  will  be  essential  to  have  the  supervision  good  enough 
so  that  recharging  after  use  shall  not  be  delayed  and  any  temp- 
tation to  install  it  where  the  conditions  are  unfavorable  must 
be  rigidly  repressed  or  it  will  be  discredited  by  failures.  It  can- 
not be  expected  to  fill  the  place  of  the  full  fledged  sprinkler 
system. 

Every  underwriter  is  bound  to  take  chances  of  heavy  or 
total  loss  because  a  valve  is  closed  or  the  sprinkler  system  other- 
wise out  of  order  when  a  fire  occurs.  There  have  been  quite 
a  good  many  such  fires,  not  to  mention  many  lapses  of  main- 
tenance which  did  not  happen  to  bring  serious  results.  To 
prevent  such  occurrences  so  far  as  possible,  the  American  Dis- 
trict Telegraph  Company  has  perfected  a  supervisory  system 
commonly  spoken  of  as  the  A.  D.  T.  Supervisory  system,  which 
they  operate  under  the  same  organization  as  their  other  service, 
such  as  watchman,  burglar  alarm,  etc. 


96 

By  means  of  mechanical  attachments  arranged  in  an 
electrical  circuit  and  attached  to  the  devices  of  a  sprinkler 
system,  the  supervisory  system  sends  an  alarm  to  the  central 
office  and  a  man  is  at  once  sent  to  investigate  and  set  conditions 
right,  either  himself  or  by  calling  the  proper  employee  of  the 
assured.  Where  there  is  a  good  central  office  organization  the 
alarms  are  promptly  investigated  but  it  is  obvious  that  these 
results  are  likely  to  be  better  in  a  place  where  such  is  the  case 
and  where  the  risks  served  are  reasonably  close  to  the  office, 
not  scattered  about  in  the  suburbs. 

The  supervisory  system  is  usually  arranged  to  give  the 
following  indications : 

Water  flow. 

Closing  and  opening  gate  valve. 

High  and  low  pressure  alarm,  usually  used  on  systems 
and  pressure  tanks. 

Water  level  alarm  for  gravity  and  pressure  tanks. 

Temperature  limits  for  tank  water. 

In  a  sprinkler  system  which  is  equipped  as  completely 
as  possible  with  the  supervisory  system,  all  the  tanks,  gate  valves, 
and  risers  are  fitted  with  the  different  devices  and  sometimes 
the  valves  of  steam  pumps  are  likewise  equipped.  Ordinarily 
it  is  impossible  to  apply  these  safeguarding  devices  to  any  valves 
outside  of  the  buildings,  such,  for  instance,  as  city  valves  in 
the  sprinkler  supply,  which  are,  however,  much  less  apt  to  be 
interfered  with  than  those  in  the  building.  So  far  as  the  system 
in  the  building  is  concerned,  it  prevents  in  the  greatest  degree 
yet  possible  the  temporary  discontinuance  of  sprinkler  service, 
especially  limiting  the  time  in  which  it  is  out  of  service  when 
necessary  repairs  are  being  made.  The  wiring  is  installed  in 
conduit  right  up  to  the  alarm  devices  so  that  none  may  be 
exposed  to  malicious  or  careless  interference  and  if  a  break  in 
the  circuit  occurs  a  trouble  alarm  is  received.  The  supervisory 
system  trains  the  assured  to  take  better  care  of  his  sprinkler 
system  and  its  records  give  underwriters  information  in  regard 
to  the  relative  care  exercised  at  different  risks  and  very  clearly 
indicate  where  persistent  carelessness  exists. 

The  system  has  only  been  put  in  in  the  larger  cities  since 
obviously  the  complete  value  depends  upon  the  maintenance 
of  a  somewhat  elaborate  office  organization. 

The  report  of  the  company  for  the  quarter  ending  March 
31,  1916,  shows  that  they  had  altogether  2,104  buildings  com- 
pletely equipped  with  the  supervisory  system  in  73  cities,  the 
greatest  number  being  in  Chicago,  Cincinnati,  New  York. 
Minneapolis,  and  Toledo,  which  contain  939  of  these.  To 
illustrate  one  of  the  most  common  troubles  with  sprinkler 
maintenance,  note  that  for  the  quarter  the  number  of  alarms 
for  gate  valves  closed  averaged  1.9  per  building.  Out  of  5,376 
signals  indicating  flow  of  water  in  the  sprinkler  system,  which 


97 

did  not  include  tests  made  purposely,  only  84  were  for  fire  and 
473  for  leaks,  while  4,819  were  due  to  working  on  the  system 
and  other  such  causes,  which  shows  pretty  plainly  how  much 
chance  for  interruption  to  sprinkler  service  there  is  and  what 
a  good  check  on  it  supervisory  service  exercises. 

With  all  the  precautions  that  can  be  adopted  to  make 
efficient  the  sprinkler  system  in  the  risk  itself,  the  best  system 
may  be  burned  out  of  existence  by  a  severe  exposure  unless  the 
openings  on  the  risk  are  efficiently  protected.  One  of  the  best 
examples  of  this  fact  is  the  Naumkeag  Cotton  Mills,  Salem, 
Massachusetts,  a  risk  of  excellent  construction  and  equipment, 
which  was  practically  destroyed  in  the  conflagration  of  1914, 
as  well  as  a  number  of  other  sprinkled  risks  with  less  ability 
to  resist.  Such  long  continued  exposure  opens  so  many  heads 
that  even  the  most  robust  water  supplies  are  likely  to  be  over- 
taxed and  then  the  risk  bums. 

The  fact  must  be  admitted  but  as  it  happens  only  62  cases 
have  been  reported  of  the  failure  of  sprinkler  protection  by 
reason  of  exposure  or  conflagration  covering  a  period  of  18 
years,  in  which  the  reported  number  of  unsatisfactory  sprinkler 
fires  of  every  sort  was  813,  or  4.65%  of  the  grand  total  of  sprinkler 
fires,  17,533. 

Based  on  this  grand  total,  statistics  concerning  the  efficiency 
of  sprinkler  protection  are  derived.  These  statistics  must 
err  on  the  side  of  not  showing  sprinkler  protection  as  efficient 
as  it  really  is,  because  since  it  is  impossible  to  obtain  a  report 
of  every  sprinkler  fire,  those  which  are  put  out  by  a  few  sprinklers 
with  small  loss  would  be  the  kind  least  apt  to  be  reported  since 
they  are  more  likely  to  escape  the  notice  of  the  insurance  or- 
.ganizations  than  those  of  heavier  loss  or  spectacular  failure. 
Therefore,   the  insurance  sprinkler  statistics  are  conservative. 

They  show  that  only  one  sprinkler  operated  in  31.1%  of 
17,093  cases,  only  three  in  57.8%  and  that  85.2%  showed  the 
operation  of  not  more  than  12. 

Of  15,252  cases,  80%  were  under  the  wet  system  and  20% 
dry  system,  which  is  a  good  indication  of  their  relative  use. 

Subtracting  the  unsatisfactory  sprinkler  fires,  there  were 
16,720  cases  of  satisfactory  sprinkler  control,  in  64.51%  of  which 
the  sprinklers  extinguished  the  fire  practically  unaided. 

Some  kinds  of  risks  handicap  sprinklers  by  conditions  of 
their  occupancy,  principally  for  one  or  more  of  these  reasons: 
very  combustible  contents,  explosion  hazard,  obstructions,  corro- 
sion or  loading,  operating  conditions  otherwise  unfavorable 
to  maintenance  of  sprinkler  protection.  The  percentage  of 
unsatisfactory  sprinkler  fires  was  3.8%.  Taking  those  classes 
that  show  too  few  fires  reported  to  give  a  dependable  experience 
and  fixing  7%  or  more  of  unsatisfactory  sprinkler  fires  as  the 
basis  of  selection  gives  the  following  classes  of  risks  as  showing 
the  most  difficult  of  sprinkler  control :   • 


98 

Car  Houses,  Hat  Factories,  Fur 

Celluloid  Factories  Match  Factories 

Cereal  Mills  Morocco  Leather  Factories 

Chemical  and  White  Lead  Oil  Cloth  and  Linoleum  Works 

Cooperage  Plants  Paper  Mills 

Cotton  Warehouses  Picture  Frame  Factories 

Cotton  Seed  Oil  Mills  Chemical  Pulp  Mills 

Elevators,  Grain  Saw  and  Planing  Mills 

FertiHzer  Plants  Shoddy  Mills 

Flour  and  Grist  Mills  StampingandSheet  Metal  Works 

Furniture  Factories  Tanneries 

Glass  Works  Wooden  Box  Factories 

The  record  of  automatic  sprinklers  has  been  so  good  that 
even  in  the  hearts  of  cities  where  a  sprinkled  risk  may  be  subject 
to  destruction  from  conflagration  exposure,  every  newly  equipped 
risk  is  considered  as  diminishing  the  chance  of  conflagration 
since  it  is  almost  never  the  case  that  a  fire  in  one  sprinkled  risk 
extends  to  another  one  and  a  careful  examination  of  the  records 
of  loss  of  life  in  buildings  equipped  with  automatic  sprinklers  shows 
that  there  have  been  very  few  cases  indeed.  This  most  important 
feature  of  protection  to  life  has  led  to  the  passage  of  municipal 
ordinances  and  in  some  cases  state  laws  requiring  that  risks 
which  employed  large  numbers  of  employees  under  conditions 
unusually  unfavorable  to  their  safety  in  case  of  fire  should 
be   equipped  with   sprinklers. 

The  economic  reason  for  equipping  risks  with  sprinklers 
because  of  the  saving  in  insurance  premium  has  been  the  par- 
ticular incentive  to  the  property  owner  in  the  majority  of  cases 
because  this  reason  is  always  present. 

The  total  number  of  sprinkled  risks  (not  buildings)  in  this 
country  is  probably  about  25,000,  with  an  approximate  increase 
in  number  of  about  8%  a  year,  with  every  indication  for  the 
immediate  future  that  there  will  be  no  material  falling  off  in 
the  number  of  risks  equipped  from  year  to  year. 


The  Analytic  System  for  the   Measure- 
ment of  Relative  Fire  Hazard 

BY 

EDWARD  R.  HARDY 

Some  Notes  on  tke  Analytic  System  for  tke  Measurement  of  Relative  Fire  Hazard. 

TKese   Notes   are   based   on   tke  Four  Lectures  delivered  before  tke  Insurance  Institute  of 

Hartford,  January  and  February,  1916. 

The  Analytic  System  for  the  Measurement  of  Relative 
Fire  Hazard  —  more  commonly  known  as  the  Dean  Schedule  — 
is  set  forth  in  its  full  form  in  the  edition  of  1914,  by  Mr.  J.  V. 
Parker,  Manager,  76  West  Monroe  Street,  Chicago,  111.  An 
explanation  of  the  system  based  on  lectures  and  class  work  is 
published  by  Jay  S.  Glidden,  Chicago,  111.  In  addition  to  these 
standard  publications  the  student  should  acquaint  himself 
with  the  writings  of  Mr.  Dean,  among  others  the  following: 

"Rationale  of  Fire  Rates,  2nd  Edition,  Chicago,  J.  M.  Murphy, 
Pub."      _  _  •       _ 

"Fire  Rating  as  a  Science,  same  place  and  publisher." 
"Fire  Hazard,  is  it  Measureable?     A.  F.  Dean,  Chicago,  111." 
Mr.  Dean  has  set  forth  in  a  letter  published  in  the  Cyclo- 
pedia of  Fire  Prevention  and  Insurance  this  statement  in  regard 
to  the  historical  development  of  this  system: 

"It  began  with  a  paper  read  before  the  Missouri,  Kansas,  and 
Nebraska  Fire  Underwriters  Association  in  1880,  on  the  subject  of 
"Irregular  Frame  Exposures."  This  paper  embodies  some  formulas 
on  the  subject  which  I  personally  used  for  many  years.  On  July  17th, 
1889,  I  formulated  a  schedule,  at  the  request  of  the  companies,  along 
the  same  line  of  reasoning,  but  it  was  not  adopted  because  of  its  being 
regarded  as  too  complicated.  On  December  the  11th,  1902,  I  issued  a 
pamphlet  entitled  "Exposure  formulas  and  basis  tariff  for  frame,  iron- 
clad, and  brick  veneered  buildings  and  contents."  This  was  at  once 
put  to  use  for  practical  rating  purposes  in  Illinois  and  several  other 
states.  On  March  the  11th,  1903,  I  completed  a  basis  tariff  for  brick 
buildings,  and  contents,  which  was  also  put  to  immediate  use  by  the 
companies.  On  June  27th,  1903,  I  issued  a  second  edition  combining 
the  two  tariffs  above  named,  under  the  title  of  "Mercantile  Tariff  Expo- 
sure Formulas  for  the  Measurement  of  Fire  Hazard,"  which  also  went 
into  immediate  use  as  a  rating  tariff  for  the  smaller  towns,  but  the  use 
of  it  in  larger  towns  required  various  expansion,  and  on  October  17th, 
1904,  I  issued  a  new  edition  under  the  name  of  "Analytic  System  for 
the  Measurement  of  Relative  Fire  Hazard."  Immediately  after  the 
Baltimore  fire  I  was  asked  to  expand  the  system  so  as  to  cover  the  large 
cities  in  lieu  of  the  tariff  that  had  been  in  previous  use.  This  was  done, 
but  the  tariff  did  not  go  into  use  until  immediately  after  the  San  Francisco 
conflagration.  On  June  15th,  1906,  the  edition  for  large  cities  was  issued 
and  has  been  in  use  ever  since,  being  expanded  from  time  to  time  as  new 
problems  arose." 


100 

The  method  of  determining  the  rate  in  fire  insurance  has 
shown  a  progressive  tendency  from  the  beginning.  It  origi- 
nated naturally  with  what  we  commonly  know  as  the  "flat 
rate  system,"  but  from  that  it  soon  departed  and  began  to  split 
the  flat  rate  into  different  parts  for  the  purpose  of  more  correctly 
analyzing  the  hazard  involved.  The  Dean  Schedule  recognizes 
the  fundamental  factors  which  affect  the  rate  of  insurance; 
building,  construction,  occupancy,  protection  (whether  it  be 
public  or  private)  and  the  exposure  charge.  These  factors  were 
early  recognized  in  rating  as  soon  as  the  flat  rate  system  com- 
menced to  be  departed  from,  but  while  recognized,  later  schedules 
have  carried  their  analysis  to  a  higher  point,  and  one  of  the 
developments  is  a  truer  analysis  of  these  different  factors. 

The  Dean  Schedule  while  recognizing  the  points  noted, 
considers  two  other  principles  of  equal  importance.  They  are: 
First,  the  element  of  place.  This  deals  with  the  different  amounts 
of  losses  in  different  localities  on  the  same  class  of  risk.  It  is 
stated  that  as  you  begin  at  the  eastern  seaboard  and  travel 
westward,  at  least  to  the  Rocky  Mountains,  the  average  of 
the  loss  cost  constantly  increases.  In  other  words,  the  burning 
ratio  is  higher.  A  test  was  made  of  twenty-two  states  selected 
somewhat  at  random,  eight  east  of  the  Ohio  showed  an  average 
loss  cost  of  .55  per  $100  for  13  years,  and  fourteen  west  of  the 
Ohio  showed  .79  as  the  loss  cost,  which  is  ,44  per  cent  higher 
than  the  states  east;  Wisconsin  runs  in  the  neighborhood  of 
.72,  and  Texas  usually  not  less  than  .89,  and  sometimes  above 
that. 

Second,  the  element  of  time.  On  this  point  Mr.  Dean 
had  best  be  allowed  to  speak  himself : 

"You  doubtless  realize  that  as  a  system  schedule  rating  consists 
of  the  establishing  of  revelations  in  hazard;  that  it  deals  with  a  complex 
problem  of  relativity.  Year  after  year  there  is  an  unending  succession 
of  changes  in  the  loss  and  expense  ratio,  which  together  constitute  the 
cost  ratio  of  fire  insurance;  and  there  is  an  imperative  necessity  that 
rates  shall  be  changed  with  some  regard  to  the  fluctuating  cost  of  the 
thing  sold.  The  present  tariff  system  makes  no  provision  whatever  for 
making  these  changes  in  rates.  It  is  simply  a  system  of  static  relations. 
To  make  rate  changes  it  is  necessary  to  construct  new  basis  schedules, 
which  are  merely  congeries  of  untried  suppositive  relations,  and  then 
apply  these  schedules  in  making  hundreds,  perhaps  thousands,  of  local 
tariffs.  To  re-rate  the  entire  country  in  this  way  is  a  task  of  greater 
magnitude  and  expense  than  that  of  taking  a  national  census. 

"Before  these  new  tariffs  can  be  applied  there  is  almost  sure  to 
be  a  rise  or  a  fall  in  the  wave  of  annual  loss,  which  makes  the  new  rates 
either  too  low  or  too  high.  There  is  no  assurance  that,  when  they  become 
effective,  the  new  rates  will  fit  existing  conditions  any  better  than  the 
old  rates.  If  too  high,  there  is  a  revolt  on  the  part  of  the  public,  and  an 
immediate  growth  of  mushroom  competition  which  makes  it  necessary 
to  begin  at  once  the  work  of  daubing  the  new  tariff  with  competitive 
rates.  These  competitive  rates,  from  their  nature,  are  out  of  alignment 
with  other  rates,  and  as  they  multiply,  soon  destroy  all  relativity  as 
well  as  all  fairness  in  the  tariffs.  Again,  high  rates  generate  preferred 
classes,  which  are  greedily  sought  by  companies  willing  to  pay  high  com- 
missions, and  this  leads  inevitably  to  a  permanent  increase  in  the  expense 


101 

ratio,  which  must  ultimately  be  made  good  by  the  public.  If  rates  are 
temporarily  too  low  on  some  classes,  other  classes  must  make  good  the 
deficit.  If  too  low  on  all  classes,  there  is  an  exodus  of  insurance  capital, 
until,  in  a  panic,  rates  are  sent  skyward  by  a  percentage  advance  which, 
unlike  the  rain,  falls  harder  on  the  righteous  man  than  on  the  unrighteous, 
for  the  man  who  is  already  paying  the  highest  rate,  relatively,  must  submit 
to  the  largest  increase  under  the  percentage  advance.  The  result  of  this 
is  that  the  house  of  fire  insurance  is  a  house  undergoing  constant  altera- 
tions and  repairs.  The  hammer  and  saw  of  the  builder  and  the  pick-axe 
and  shovel  of  the  wrecker  never  cease  their  din  in  the  process  of  schedule 
rating  and  unrating.  Anything  approaching  order,  system,  or  any  of 
their  synonyms  in  this  turmoil  of  creation  and  destruction  is  out  of 
the  question;  even  in  the  last  resort  of  a  percentage  change  in  the  absence 
of  any  generally  accepted  definition  of  classes,  it  is  impossible  to  describe 
what  groups  are  to  be  changed  without  a  long  sequence  of  explanatory 
circulars,  and  circulars  explanatory  of  these  explanatory  circulars." 

The  rate  is  defined  under  the  system  as  a  "bundle  of  rela- 
tions." It  is  all  a  part  of  a  whole,  and  yet  all  so  bound  together 
that  it  constitutes  but  one  body,  and  you  cannot  disrupt  or 
over-emphasize  a  part  without  disturbing  the  whole.  To  cor- 
rectly measure  fire  hazard  it  is  necessary  to  set  up  standards  that 
may  be,  though  in  many  cases  they  seem  to  be,  rather  than  are, 
empirical  standards.  This  seeming  is  due  to  the  fact  that  our 
knowledge  is  not  yet  exact  enough  to  correctly  estimate  the 
affect  of  fire,  smoke  and  water  under  all  circumstances  when 
once  a  fire  has  been  started.  In  many  cases  we  are  able  to 
develop  standards  which  enable  us  to  bring  a  thing  down  to 
a  certainty  or  practical  certainty,  knowing  that  if  the  hazard 
is  grouped  in  the  way  the  standard  says  it  shall  be,  the  strong 
chances  are  that  no  fire  will  result. 

The  schedule  itself  must  be  empirical  because  it  is  merely 
the  expression  of  the  standard,  but  this  is  true  of  all  standards 
that  exist;  no  reason  why  a  certain  length  should  be  called  a 
foot  or  a  certain  number  of  ounces  a  pound,  or  a  certain  amount 
of  time  an  hour,  but  the  commonly  accepted  standards  for  these 
elements  have  been  adopted,  and  empirical  though  they  be, 
they  perform  the  work  for  which  they  are  intended.  The  Analytic 
System,  it  has  been  stated,  is  founded  on  the  belief  that  the 
analysis  of  fire  hazard  involves  a  measurement  of  the  relations 
which  embrace  our  knowledge  of  fire  hazard,  by  a  standard 
which  must  necessarily  be  empirical  and  which  must  be  applied 
without  change  to  all  degrees  of  hazard  now  existing  or  possible 
to  exist. 

The  shedule  is  based,  so  far  as  credits  and  charges  other 
than  the  base  rate  are  concerned,  almost  entirely  on  the  per- 
centage system.  This  is  departed  from  in  two  respects  which 
will  be  explained,  one  dealing  with  susceptibility  to  damage, 
and  the  other  with  after  charges.  Now  this  percentage  system 
is  the  thing  which  welds  the  parts  of  the  schedule  into  a  con- 
sistent whole,  and  makes  it  sustain  to  the  community  a  different 
relation  according  as  the  losses  vary  from  time  to  time.  If, 
for  instance,   in  a  certain  town  the  basis  for  frame  buildings 


102 

was  .80  and  there  was  a  charge  for  a  non-standard  chimney 
of  10%,  the  charge  would  be  .08.  Now  let  us  suppose  that  the 
experience  of  this  town  has  improved  —  or  its  physical  condi- 
tions, rather  —  and  we  are  able  to  make  a  base  rate  of  .60. 
The  charge  for  our  chimney  is  still  10%  or  .06.  In  other  words, 
it  maintains  to  the  basis  rate  the  same  relation  which  it  did 
before,  namely  10%.  Under  most  other  systems  the  charge 
for  the  chimney  would  be  a  fiat  charge,  let  us  say,  of  .10.  This 
is  123^%  of  the  basis  rate  of  .80,  and  when  the  basis  rate  drops 
to  .60  it  becomes  IQ}^  of  that  basis  charge.  This  illustrates 
what,  in  the  schedule,  is  called  the  "theory  of  relativity."  In 
other  words,  the  parts  of  the  rate  are  consistently  held  one  to 
another,  never  mind  how  much  the  general  basic  conditions 
may  vary. 

Passing  from  these  general  principles  we  come  to  the  manner 
in  which  the  details  are  taken  care  of. 

Height:  As  a  standard  a  one-story  building  is  taken  and 
charges  added  as  the  building  increases  in  height.  This  height 
charge  is  based  on  a  progressive  increase  until  it  reaches  the 
sixth  story  when,  as  it  is  considered  beyond  the  reach  of  the 
fire  department,  the  same  charge  is  made  for  the  sixth  story 
and  each  succeeding  story.  If  there  is  no  basement  a  reduction 
is  made  from  the  basis  rate,  while  the  sub-basement  is  charged 
an  amount  equal  to  the  deduction  for  a  basement. 

Area:  The  standard  for  area  is  1,000  square  feet.  The 
student  should  notice  that  the  standard  pre-supposes  a  very 
small  structure,  one  story  in  height,  1,000  square  feet  area. 
The  charges  are  added  for  the  increase  in  area  from  that  point. 
The  area  charges  are  subject  to  increase  for  shingle,  non-approved 
composition,  or  a  mansard  roof  of  frame  construction.  They 
are  likewise  subject  to  decreases  if  the  occupancy  be  classed 
as  non-hazardous,  and  also  may  be  reduced  by  means  of  divi- 
sion walls  which  divide  the  property  and  pierce  the  roof.  The 
area  charge  operates  in  conjunction  with  the  height.  Thus, 
a  building  of  4,000  square  feet  area  covering  one  floor  would 
have  4%  added,  two  floors  8%,  three  11%,  and  four  floors  14%. 

Walls:  The  tariffs  or  basis  used  pre-suppose  either  the 
brick  or  the  frame  wall  condition.  Where  the  brick  is  used 
charges  are  added  for  the  sub-standard  condition;  this  is  nor- 
mally 1%  for  each  1  inch  of  deficiency  that  the  wall  averages. 
The  schedule  furnishes  standards  for  party  walls,  independent 
or  exterior  walls,  walls  ledged  or  not,  those  braced  with  pilasters, 
and  those  of  pier  construction.  The  occupancy  affects  these 
charges  as  it  does  in  the  case  of  area.  Charges  are  provided 
for  the  lack  of  a  proper  parapet  if  the  building  is  near  enough 
to  another  property  to  be  damaged  by  an  exposing  fire. 


103 

Roof:  The  brick  building  calls  for  a  roof  of  metal,  tile, 
slate,  or  approved  composition  as  standard,  while  20%  is  the 
increase  made  for  a  wooden  roof  as  shingle  or  an  unapproved 
composition  is  accepted  as  standard,  and  an  allowance  made 
if  the  roof  be  of  metal,  tile,  slate  or  approved  composition. 

Ceilings:  In  brick  buildings  a  charge  is  made  for  wooden 
ceilings,  each  story,  and  a  larger  charge  for  strawboard,  paper 
or  canvas  ceilings,  each  story.  Should  the  walls  be  sheathed 
as  well  as  the  ceilings  these  charges  will  reduce  one-half. 

Skylights:  A  charge  is  made  in  brick  buildings  for  openings 
which  pierce  the  roof  and  are  not  covered  by  a  standard  sky- 
light, 3%  for  the  openings  40  square  feet  or  less,  subject  to  an 
increase  of  1%  if  the  skylight  exceeds  40  square  feet,  and  2% 
for   each   additional  skylight. 

Floor  Openings:  All  the  openings  through  a  fioorway  are 
referred  to  as  its  "retinue."  The  floor  openings  are  divided 
into  grades,  that  for  "A"  running  as  follows: 

A.  Matched  wooden  flooring  laid  on  joists  of  ordinary  dimen- 

sions   with    lath    and    plaster,    wood    or    metal    ceiling 
beneath.     (This  is  the  lowest  type  of  grade  there  is.) 

B.  This   grade  is  the  same  as   "A"   with  the  exception  that 

there  are  two  layers  of  matched  flooring. 

C.  (1)     The  floors  must  be  not  less  than  3"  thick; 

(2)  The  supports  for  the  floor  beams,  girders,  posts,  at 
least  6x6  inches.     If  iron  or  steel  must  be  protected; 

(3)  'The  finish  should  be  without  concealed  spaces; 

(4)  Any  partitions  must  be  non-combustible. 

To  illustrate  the  manner  of  charging  or  crediting:  If  the 
floor  opening  or  retinue,  as  it  is  called,  be  below  "A"  an  addition 
of  5%  is  made  for  each  fioorway.  If  it  be  '*A"  there  is  neither 
a  credit  nor  a  charge  made.  If  it  be  equal  to  "B"  a  1%  credit 
is  made  for  each  floor. 

As  this  treatment  of  fioorways  is  so  important,  a  bit  of 
an  illustration  may  not  be  out  of  place:  The  fioorways  are 
matched,  take  the  grade  of  **A";  there  is  an  elevator  running 
from  the  basement  to  the  second  floor,  where  it  pierces  the 
first  floor  it  is  protected  by  an  automatic  elevator  trap  which 
grades  as  "A".  When  it  passes  through  the  second  fioorway 
it  is  unprotected  and  so  grades  "below  A."  There  is  also  a 
stairway  basement  to  third  floor,  all  openings  unprotected, 
and  so  ranks  "below  A".  Now  the  poorest  floor  opening  deter- 
mines the  charge  in  the  floorway.  In  this  case  this  is  the  stair- 
way. So  for  the  first  fioor  the  charge  will  be  5%.  The  second 
floor  will  be  5%,  plus  1  or  6%,  and  the  third  floor  will  be  5%, 
or  a  total  of  16%. 

It  should  be  carefully  noted  by  the  student  that  this  manner 
of  charging  for  floor  openings  is  a  very  consistent  piece  of  work. 
It  binds  the  whole  thing  together.  It  is  probably  fundamen- 
tally true  that  the  enclosure  to  a  shaft  need  not  be  so  much  better 


104 

than  a  floor  itself,  and  if  you  have  a  single  1-inch  matched 
flooring,  the  floor  opening  protected  by  the  equivalent  of  that 
with  a  substantial  wood  door,  is  undoubtedly  all  right. 

Partitions:  Must  be  what  would  be  commonly  accepted 
as  fireproof,  brick,  tile,  plaster  on  expanded  metal.  A  charge 
would  be  made  for  wooden  partitions. 

Chimneys:  These,  it  is  recommended,  should  be  of  brick; 
must  always  be  built  from  the  ground,  though  a  chimney  built 
on  a  ledge  in  the  wall  may  be  accepted. 

Outside  Attachments:  A  brick  building  is  assumed  to  have 
no  wood  trimmings  such  as  cornices,  awnings,  roof  houses,  etc. 
A   small   charge  is  made  if  any  exist. 

Warerooms:  In  many  cases  a  very  good  brick  warehouse 
has  added  thereto  what  is  commonly  known  as  a  one-story 
extension.  Usually  this  is  of  an  inferior  type  of  construction, 
as  frame.  This  bad  feature  is  taken  care  of  by  a  percentage 
charge  which  is  determined  by  the  relation  between  the  floor 
space  of  the  wareroom  and  the  floor  space  of  the  entire  property. 

Superior  Construction:  Even  an  ordinary  building  may 
be  superior  to  the  general  run  of  such  properties,  and  recognition 
is  made  of  that  fact. 

After -charges:  These  take  care  of  other  bad  features  such 
as  broken  plaster,  holes  in  the  floor,  cracked  walls,  etc.  To 
secure  the  correction  of  such  defects  the  generally  accepted 
system  of  a  flat  charge  is  made,  and  this  is  the  final  charge 
in  the  rate. 

An  example  of  rating : 

Ordinary  Building. 

Basis,  5  story  and  basement  building,  $0.77 

Area,  5,000  square  feet,  six  floors  with  basement,  22% 

Two  walls,  side,  deficient  4  inches  each  at  4%,  total,     8% 
Two  parapets,  deficient,  each  2%,  total,  4%  . 

Five  floorways  grading  as  "B"  with  two  openings  each 
floorway  grading  as  "below  a";   this  is  5%,  plus  1%,  r' 
equalling  6%,  multiplied  by  the  number  of  floors 
(five),  total,  30% 

Inasmuch  as  we  have  not  yet  considered  occupancy, 

we  will  consider  that  the  occupancy  adds,  109  % 

The  total  additions,  therefore,  to  the  basis  rate  are: 
area  22%;  side  walls  deficient  8%;  parapets  defi- 
cient 4%;  floorways  30%;  occupancy  109%,  or 
a  TOTAL  of,  173% 

that  is,  we  add  173%  to  the  basis  rate  of  .77. 

Occupancy. 

Mr.  Dean  has  said  that  in  the  matter  of  occupancy  there 
is  no  evidence  that  any  of  the  rating  schedules  have  treated 
it  except  in  a  very  elementary  manner.  The  risk  of  occupancy, 
meaning  thereby  not  merely  the  risk  to  the  building  but  to  the 


105 

occupancy  or  stock  itself,  is  split  into  three  parts.  First,  as 
something  which  may- cause  a  fire;  second,  as  a  fuel  or  medium 
for  fire;  and  third,  as  the  effect  of  fire,  smoke  and  water  on  the 
stock.  The  first  can  be  defined  as  the  cause;  the  second  as  the 
medium,  and  the  third  as  the  damageability. 

The  first,  or  causation,  can  perhaps  be  better  considered 
if  we  consider  the  second  first.  The  schedule  divides  combusti- 
bility or  fuel  into  these  grades:  Low,  MiddHng,  High,  Quasi- 
Incendiary,  and  Incendiary.  These  are  five  grades  but  there 
are  a  couple  of  intermediate  grades  which  are  used,  as  one 
coming  between  the  third  and  fourth,  and  one  between  the  fourth 
and  fifth.  Within  these  groups  examples  may  be  given.  Low: 
a  stock  of  hardware;  MiddHng:  retail  groceries;  High:  straw 
goods,  saltpeter,  etc.;  Incendiary:  oils  such  as  petroleum, 
and  of  course  the  lighter  varieties,  ethers,  paints,  turpentine, 
etc.  The  grade  which  is  placed  between  three  and  four  refers 
to  large  open  stocks  and  not  to  the  character  of  the  stocks, 
and  that  placed  between  four  and  five  deals  with  risks  having 
a  minor  industrial  'hazard. 

Causes. 

Causes  are  divided  into  "active"  and  "inert."  The  inert 
are  represented  by  banks,  offices,  etc.  The  active  are  divided 
into  dwelling  occupancies,  places  of  assembly,  and  third,  the 
industrial  group.  The  dwelling  group  or  habitational,  as  it 
is  called,  includes  dwellings,  apartment  houses,  boarding  houses, 
clubs,  etc.  Places  of  assembly  include  everything  where  people 
gather  from  clubrooms  to  schoolhouses,  while  the  third  (indus- 
trial group)  embraces  every  variety  of  manufacture  where 
■motive  power  is  used,  and  usually  in  connection  therewith 
some  form  of  heat.  There  is  a  special  table  dealing  with  the 
labor  charge,  the  minimum  charge  being  five  hands  or  under, 
and  then  additional  charges  being  made  as  the  hands  increase, 
thus  as  five  additional,  ten,  twenty,  thirty,  forty.  The  labor 
table  makes  a  higher  charge  according  to  the  classification 
for  occupancy  of  the  business.  Thus,  forty  additional  hands 
in  the  low  grade  adds  20%,  but  in  the  fifth  grade  it  adds  65%. 
All  devices  which  call  for  the  use  of  heat  are  closely  analyzed, 
and  very  intelligent  work  has  been  done  with  these  factors. 
There  is  treated  in  turn  the  electric  power,  gas,  hot  air,  kerosene 
or  natural  gas  engine,  and  steam  power  as  well  as  the  standard 
gasolene  engine.  Apparently  the  electric  power  encased  ranks 
the  highest  as  it  makes  no  addition,  but  if  not  encased  there 
is  no  charge  in  the  low  occupancy  grade  but  the  charge  becomes 
20%  when  it  reaches  the  3}/^  grade. 

Furnaces  are  divided  into  Hand  Furnaces,  Fixed  Furnaces 
or  Movable  Furnaces.  These  are  treated  very  consistently 
according  to  the  hazard,  the  same  as  the  power  devices  are. 


106 

There  is  also  special  recognition  of  the  dry  room  hazard  in  all 
forms. 

The  third  thing  that  affects  the  rate  on  occupancy  is  the 
question  of  damageability.  Fire  and  heat  are  defined  as  direct 
effects  and  the  others  are  resulting  effects.  This  damageability 
is  divided  into  four  grades,  as  D-1,  D-2,  etc.  D-1  is  low  as 
hardware,  leather,  or  rubber  stocks,  etc.  D-2  is  middling,  as 
retail  dry  goods,  etc.  D-3  is  high,  musical  instruments,  books, 
stationery,  produce,  etc.  D-4  is  extra  as  millinery,  artificial 
flowers,  florists'  stock,  etc.  Three  intermediate  grades  have 
been  established,  D-1 3/^,  D-23^  and  D-3 3^.  These  are  midway 
between  their  respective  grades.  Mr.  Dean  considers  that 
so  far  as  damageability  is  concerned  it  bears  no  fixed  relation 
to  the  other  factors  in  a  risk,  whether  the  construction  of  the 
building,  the  question  of  causation  or  combustibility.  It  is 
distinct  in  itself,  and  therefore  a  specific  charge  is  made  for 
damageability.  The  charge  naturally  varies  according  as  the 
goods  are  located  in  the  basement,  ground  floor,  or  some  floor 
above.  These  occupancy  lists  are  arranged  in  alphabetical 
order,  and  show  three  things;  thus,  to  illustrate :  Carpet  cleaning 
establishments,  one  gallon  of  gasolene  in  a  safety  can  allowed 

_J 2       &      3 

25%         40%  D2 

In  number  1  the  causation  is  estimated  at  25  %,  under  number 
2  the  combustibility  at  40%,  while  under  numlDcr  3  in  Damage- 
ability  Table  No.  2  will  be  found  the  proper  charge  to  be  added. 
This  charge,  of  course,  would  be  the  one  for  the  floor  on  which 
the  tenant  is  situated. 

Fire  Protection  and  Exposure  Charges:  Public  protection  is 
divided  into  six  classes,  the  flrst  class  being  as  follows:  The 
water  works  to  be  of  gravity,  combined  or  a  direct  pressure 
system,  with  reserve  or  standpipe,  pumps  and  boilers  of  required 
capacity.  All  specified  standards  to  be  fulfilled  for  the  pumping 
station,  the  pressure,  the  mains,  gate  valves  and  hydrants. 
Finally,  where  necessary,  an  approved  high  pressure  system. 
The  fire  department  call  for  the  full  equipment  of  apparatus, 
full-paid  men,  hose  and  fire  alarm  system,  while  the  ordinance 
should  make  provision  for  building,  electrical  and  general 
inspection.  The  streets  of  the  city  or  town  should  be  of  the 
standard  width,  well  paved  and  lighted.  This  is  the  highest 
class,  and  from  that  to  the  sixth  class  there  are  gradual  reduc- 
tions in  the  requirements.  Thus,  the  second  class,  the  pumping 
station  may  be  in  a  brick  building  instead  of  a  fire  resistive, 
there  need  be  no  high  pressure  system,  and  there  may  be  a  slight 
deficiency  in  gate  valves.  The  fire  department  need  not  have 
quite  as  many  men,  the  ordinances  must  be  the  same,  but  the 
wires  need  not  be  underground.  The  third  class  averages 
about  three-fourths  of  the  standard  for  the  first  class.  The 
fourth  class  runs  about  50  per  cent.     There  is  a  four-and-a-half 


107 

class  where  the  water  works  are  not  quite  to  the  standard  of 
the  fourth  class,  the  fire  department  is  slightly  deficient,  and 
there  are  no  ordinances.  In  the  fifth  class  there  are  no  water 
works,  and  the  fire  department  is  volunteer;  there  are  no 
ordinances.  Finally,  the  sixth  class,  there  is  no  fire  protection 
at  all. 

The  analytic  system  works  out  a  method  of  base  rates  in 
connection  with  these  various  classes  on  a  plane  running  some- 
thing as  follows: 

Class  1  2  3  4  43^  5  6 

1  story,  $0.54     $0.61     $0.69     $0.78     $0.86     $0.94     $1.00 

These  base  rates  are  increased  for  each  story  over  one 
as  illustrated  by  this  table: 

Class  1  2  3  4  43^  5  6 

1  story,  $0.54     $0.61     $0.69     $0.78     $0.86     $0.94     $1.00 

2  stories,  .57  .64  .73  .82  .91  .99        1.05 

3  stories,  .60  .67  .76  .86  .95       1.04        1.10 

The  frame  basis  table  makes  the  reductions  less,  thus: 
assuming  a  $1.00  rate  in  class  6  for  a  one-story  building,  in  class 
1  it  would  be  $0.68.  In  other  words,  less  credit  is  given  a  frame 
building  for  public  protection  than  is  given  a  brick  building. 

In  regard  to  public  protection  consideration  is  given  to 
the  fact  that  there  is  a  difference  in  its  value  to  building  and 
contents.  There  will  be  under  high  grade  protection  a  greater 
relative  loss  so  far  as  the  contents  are  concerned  than  the  build- 
ing, the  water  damage  making  up,  if  not  more  than  making  up 
for  the  increased  fire  loss  on  contents  as  compared  with  the  build- 
ing in  the  unprotected  territories.  The  treatment  of  the  con- 
tents is  based  on  the  consideration  of  their  damageability  once 
a  fire  has  started  in  the  risk.  Thus,  in  the  basement  of  a  risk 
a  stock  which  would  be  classified  under  Damageability  No.  1 
at  .30  would  run  up  to  .86  under  Damageability  No.  4.  On 
the  first  floor  it  would  be  less  and  run  from  .22  to  .74,  but  on 
the  eighth  floor  and  over  it  would  run  from  .61  to  1.31. 

Private  Protection:  Public  protection  deals  with  those 
factors  which  are  controlled  by  the  community  as  a  civic  problem. 
When  we  come  to  private  protection  credit  naturally  is  only 
given  to  those  buildings  which  are  protected.  The  credit  is 
a  percentage  of  the  final  rate  of  the  building,  but  does  not  include 
the  exposures.  This  application  of  the  credit  to  the  final  rate 
is  largely  for  convenience  and  not  for  any  other  reason.  The 
credits  are  as  follows : 

1.  Inside  standpipe  and  hose,  5% 

2.  Outside  fire  escape  and  standpipes  on  buildings  three 

stories  and  over,               *  4% 

3.  Autornatic  fire  alarm  system,  10% 

4.  Chemical  extinguishers  or  casks  and  pails,  5% 

5.  Watchman  with  approved  clock,  5% 

6.  Watchman  reporting  to  central  station,  10% 

7.  Heat  from  outside  source  or  no  heat,  5% 

8.  Approved  whitewash  or  fireproof  paint  on  all  exposed 

interior  woodwork,  2% 


108 

Exposures:  The  work  of  the  Dean  Schedule'  in  regard  to 
Exposures  is  one  of  the  best  things  in  connection  with  the 
schedule.  In  fact  it  is  a  superb  piece  of  work.  It  will  be  recalled 
that  the  schedule  originated  in  an  effort  to  work  out  the  problem 
of  rating  frame  rows  or  "ranges,"  as  they  are  called  in  the  middle 
western  towns.  The  exposure  is  considered  from  three  angles. 
First,  all  buildings  radiate  or  give  out  a  part  of  their  own  hazard 
to  other  buildings.  Second,  they  absorb  a  part  of  the  hazard 
of  other  buildings,  and  third,  transmit  or  pass  along  part  of 
this  absorbed  hazard  from  other  buildings.  Mr.  Dean  says 
that  the  extent  to  which  buildings  radiate,  absorb  and  transmit 
hazard  depends  upon  the  fire  protection  of  the  city  or  town, 
upon  the  construction  of  exposing  and  exposed  walls,  and 
upon  the  distance  between  the  exposing  and  exposed  walls. 

The  consideration  of  the  exposure  starts  with  the  rate  on 
the  exposing  building,  since  presumably  that  measures  the 
hazard  of  that  risk.  A  standard  is  established  by  developing 
an  average  based  on  certain  factors  in  the  town;  for  instance, 
in  a  certain  town  experience  might  show  that  40%  of  the  rates 
as  computed  by  the  schedule  furnish  an  adequate  basis  for 
exposure  standards.  Having  established  the  standard,  then 
at  this  point  the  construction  of  the  walls  of  the  two  properties, 
risk  and  exposure,  play  a  part.  A  very  extensive  table  has  been 
prepared  which  works  like  a  formula  and  shows  the  percentage 
of  exposure  to  be  taken  according  to  the  distance,  the  construc- 
tion of  the  properties,  the  walls,  etc.  This  table  naturally  greatly 
facilitates  the  operation  of  the  exposure  table.  The  table  will 
apply  to  at  least  eighty-eight  (88)  combinations  of  construc- 
tion in  exposing  and  exposed  buildings.  This  furnishes  the 
student  with  some  idea  of  its  value. 

Some  factors  of  the  exposure  are  considered  as  abnormal, 
as  where  the  area  or  height  exceeds  the  average,  special  treat- 
ment is  provided  for  such  cases.  Also  when  the  area  of  a  low 
building  becomes  less  than  the  average,  special  treatment 
is  provided  for  such  cases.  Abnormal  exposures  are  graded  as. 
Nil,  Negligible,  Small  and  Large.  The  first  indicates  structures 
so  small  that  they  may  be  left  out  of  consideration.  The  second 
indicates  risks  so  small  or  of  such  a  low  hazard  that  they  may 
be  ignored  for  all  practical  purposes,  while  Small  and  Large 
indicate  properties  which  according  to  their  size  radiate  more 
or  less  exposure  than  ordinary  mercantile  or  light  industrial 
buildings.  The  falling  wall  hazard  is  considered  as  well  as  the 
wall  damage  exposure.  There  is  a  small  charge  called  a  "starred 
risk  exposure."  This  is  based  on  a  risk,  which  has  a  star  in 
the  occupancy,  through  a  party  or  division  wall  without  openings. 


109 

These  notes  will  be  sufficient,  I  believe,  to  put  the  student 
so  far  as  is  necessary  for  the  examination,  in  touch  with  the 
"Analytical  System.  To  become  a  master  of  it  would  require 
weeks  of  study,  and  such  of  course  was  not  the  purpose,  nor 
could  it  be  done  in  the  time  which  we  were  able  to  devote  to  the 
subject.     The  high  spots  alone  could  be  touched." 


Agency   Organization   and    Management 

BY 

WALTER  L.  WAKEFIELD 

My  talk  to  you  this  evening  may  impress  you  more  by  what 
I  do  not  say  than  by  what  I  shall  say.  The  time  at  my  disposal 
is  too  short  to  allow  me  to  go  into  the  nimierous  minor  details 
incidental  to  an  agency  organization.  I  know  that  the  men 
before  me  this  evening  have  had  more  or  less  experience  in  the 
business  and  I  believe  my  time  can  be  spent  better  than  by 
reading  a  technical  paper,  invohnng  office  system,  powers 
and  limitations  of  agents  according  to  commissions  which  they 
may  hold  from  their  companies;  correspondence  work  and 
detailed  explanations  of  companies'  rules  and  requirements, 
the  rules  and  requirements  of  local  boards  and  similar  organ- 
izations, the  different  systems  of  rate-making,  construction 
work,  installation  of  fire  prevention  facilities,  etc..  it  is  more 
my  intention  in  the  short  time  which  I  have  at  my  disposal 
to  handle  the  topic  more  in  a  general  way  as  I  \-iew  it  and  as 
I  have  experienced  it  from  a  ser\'ice  of  35  years  in  the  business. 

The  business  of  insurance,  in  all  its  branches,  extending 
as  it  does  over  the  entire  continent,  necessitates  the  repre- 
sentation of  the  companies  by  agencies.  The  development 
of  the  business  in  the  field  is  through  agencies  of  various  charac- 
ters, such  as  general  agencies  \s-ith  wide  authority  operating 
under  salary-  or  commission  and  contingent  contracts,  local 
agencies  with  limited  authority  operating  upon  commission 
agreement  only,  local  agencies  with  more  or  less  authority 
operating  under  special  contract,  and  special  agents,  who  are 
practically  salaried  employees  of  the  home  office  travelling  in 
the  field,  looking  after  over-due  balances,  inspecting  risks, 
adjusting  losses,  establishing  agencies,  etc.  It  is  not  necessary- 
to  go  away  from  Hartford  to  witness  illustration  of  the  fact 
that  there  are  as  many  different  methods  of  agency  manage- 
ment, and  consequent  success,  as  there  are  different  agencies. 
What  I  have  in  mind  and  what  I  beheve  to  be  the  purpose 
of  this  lecttire  is  to  discuss  the  ideal  agency  organization,  in 
its  scope  and  methods. 

It  must  have  been  the  desire  of  your  committee  who  asked 
me  to  address  you  on  this  topic,  that  it  be  handled  from  the 
point  of  \-iew  of  the  proprietor  or  manager  of  an  agency,  there- 
fore it  is  my  intention  to  disregard  agency  organization  and 
management  from  the  Home  Office  point  of  \4ew. 


Ill 

The  ideal  agency  organization  should  have  the  necessary 
equipment  peculiar  to  its  particular  environment  to  transact 
the  entire  field  work  in  all  branches,  and  be  managed  with 
ability  equal  to  or  exceeding  home  office  standards.  It  assumes 
tremendous  responsibilities  and  must  be  true  to  them.  It  is 
the  companies  it  represents  on  the  firing  line,  and  to  be  success- 
ful, the  service  it  performs  for  its  clients  and  principals  must 
be  complete  and  of  high  order. 

The  agency  organization  of  the  present  day  is  a  much 
different  proposition  than  it  was  25  or  30  years  ago  when  I 
started  in  business.  In  the  old  days,  a  fire  insurance  agent  felt  that 
his  dignity  was  somewhat  at  stake  if  he  transacted  what  was 
termed  side  lines  of  insurance,  and  the  same  was  true  of  the 
life  insurance  agent,  but  today,  in  my  opinion,  the  successful 
agency  should  write  insurance  in  all  its  branches,  including 
fire,  life,  accident,  disability,  compensation,  liability,  surety 
and  contract  bonds,  for  it  would  be  surprising  to  those  who  do 
not  know  it,  how  closely  related  all  forms  of  insurance  are  to 
each  other.  Obviously  it  is  much  more  convenient  and  satis- 
factory for  the  assured  to  transact  insurance  business  in  all 
Hnes  with  one  agency,  with  whom  he  has  confidence.  Moreover, 
this  plan  produces  for  the  agency,  extra  profits,  advantages 
and  strength. 

Familiarity  with  all  forms  of  insurance  and  the  desire 
and  benefit  of  waiting  all  forms  of  insurance  aids  the  agency 
in  the  development  of  the  business  generally  in  new  channels, 
and  is  largely  responsible  for  many  of  the  new  forms  of  insurance 
that  are  constantly  appearing,  for  instance,  hail  insurance 
on  growing  crops  of  tobacco,  fire  insurance  on  tobacco  tents 
and  growing  plants,  life  insurance  protecting  partnerships, 
and  business  contract  and  group  insurance,  disability  insurance 
covering  assured  against  loss  of  time,  corporation  surety  and 
contract  bonds  that  have  completely  replaced  personal  bonds, 
et  cetera.  You  may  depend  upon  the  man  who  derives  profit 
and  satisfaction  in  the  growth  of  his  business;    for  new  ideas. 

So  I  believe  that  a  well  equipped  and  developed  agency 
organization  should  represent  and  understand  every  line  of 
insurance. 

There  are  no  uniform  hard  and  fast  rules,  or  even  well 
developed  uniform  methods  governing  the  operations  of  the 
management  of  an  agency  organization.  It  is  a  matter  that 
each  has  to  follow  and  develop  according  to  his  own  abilities 
and  his  indi\'idual  advantages  or  disadvantages,  inasmuch  as 
while -there  may.  be  several  agency  organizations  in  the  same 
city  transacting  all  kinds  of  business,  the  size,  resources,  and 
underwriting  ideas,  etc.,  of  each  may  differ  as  they  do  among 
companies  themselves.    In  general,  however,  naturally  the  usual 


112 

fundamental  principles  necessary  for  the  proper  conduct  of 
all  business  underlies  that  of  proper  agency  organization  and 
management. 

The  aim  and  ambition  of  the  agency  must  be  to  serve  with 
fidelity  and  ability  both  the  interests  of  its  companies  and  its 
clients.  The  management,  however,  cannot  be  successfully 
conducted  unless  it  is  entirely  familiar  with  the  rules  and  regu- 
lations of  the  various  underwriters  boards  and  associations, 
which  govern  not  only  the  practical  but  also  the  ethical  side 
of  the  business,  and  also  be  familiar  with  state  laws  referring 
to  insurance,  and  the  underwriting  ideas  and  policies  of  the 
companies  represented;  it  must  also  have  tact  and  character 
to  win  the  confidence  of  the  insuring  public. 

I  have  heard  it  stated  that  theoretically  all  that  is  required 
by  the  companies,  of  an  agency  organization,  is  that  it  should 
write  its  policy  contracts  correctly,  report  promptly  to  the  com- 
panies, produce  sufficient  business  and  pay  its  accounts  when 
due.  As  a  matter  of  fact,  I  must  admit  that  an  agency  that 
does  all  this,  though  it  may  do  nothing  more,  is  valuable,  but 
it  is  also  held  that  the  acceptance  and  rejection  of  risks,  inspec- 
tions, adjustment  of  losses,  etc.,  should  be  left  to  the  executive 
management  of  the  companies.  This  theory,  I  think,  is  exploded, 
at  least  as  far  as  real  agencies  are  concerned,  although  it  may 
apply  to  the  very  small  or  undeveloped  agencies.  The  insuring 
public  is  becoming  more  inclined  to  place  confidence  in  and 
patronize  an  agency  that  is  equipped  not  only  to  write  insurance 
of  all  kinds,  but  to  handle  all  details  incidental  to  the  business 
as  far  as  the  patrons  of  the  agency  are  concerned,  such  as  selec- 
tion of  companies  and  settlement  of  losses.  The  duty  of  the 
agency  towards  its  clients  and  companies  in  the  matter  of  losses 
and  adjustment  of  same,  in  particular,  is  of  supreme  importance: 
it  is  necessary  to  serve  the  best  interests  of  the  clients  as  well 
as  the  best  interests  of  the  company,  and  this  can  be  accomplished 
by  serving  with  fidelity,  honesty  and  ability,  the  aim,  ambition 
and  ideal  of  the  agency  organization. 

It  has  been  my  experience  that  the  average  assured  looks 
upon  the  average  special  agent  or  adjuster  of  the  company  as 
a  natural  enemy,  feeling  that  the  expert  is  called  in  to  make  as 
good  an  adjustment  as  is  possible,  that  is  —  settle  for  the  least 
amount,  and  he  frequently  makes  exorbitant  claims,  with  the 
expectancy  that  they  will  be  cut  down  and  that  he  will  approxi- 
mate an  adequate  amount  at  least.  On  the  contrary  he  will 
have  confidence  in  the  agency  to  whom  he  has  enl^usted  his 
business.  Consequently  the  agency  is  usually  able  to  make 
equitable  and  satisfactory  settlement  of  losses.,  both  as  far  as 
the  assured  and  the  company  is  concerned,  thereby  leaving  a 
better  feehng  all  around,  all  of  which  contributes  to  the  good 
of  the  business,  and  success  and  profit  to  the  agency. 


113 

Moreover,  all  this  aids  in  the  development  of  better  local 
conditions,  such  as  reduction  of  physical  hazards,  and,  conse- 
quent reduction  of  loss  ratio,  followed  by  reduction  of  rates, 
a  matter  always  appreciated  by  policyholders.  Also  an  agency 
organization  of  this  ideal  type  creates  such  a  community  of 
interest  between  the  agency  and  the  companies  that  they  become 
almost  inseparably  connected  as  integral  parts  of  a  complete 
organization,  in  which  both  are  necessary  for  the  greatest  success. 
In  this  way  the  agency  and  the  companies  represented  gain 
strength,  popularity  and  dignity,  rising  above  that  false  posi- 
tion that  is  very  frequently  attributed  to  agencies,  as  being 
"premium  grabbers"  only,  with  no  responsibility  or  regard 
for  results. 

It  seems  logical  that  the  most  satisfactory  agency  organ- 
ization, as  far  as  the  companies  are  concerned,  is  the  agency 
that  has  earned  by  its  fidelity  and  ability  the  complete  confidence 
and  respect  of  the  companies.  It  then  follows  that  the  acceptance 
and  rejection  of  risks  may  be  safely  left  to  judgment  of  the 
agency.  This  places  very  important  responsibilities  on  the  agency 
which  are  invariably  appreciated  with  profitable  results  because 
the  agency  is  so  familiar  with  local  conditions  it  is  more  com- 
petent to  judge  of  the  physical  and  moral  hazards. 

In  consideration  of  these  points,  it  seems  that  *the  proper 
and  most  successful  management  of  insurance  agency  matters 
contemplates  transaction  of  the  entire  business  directly  con- 
nected with  the  agency,  from  soliciting  risks  to  adjusting  losses, 
and  even  underwriting  risks. 

It  may  seem  that  this  leaves  few  responsibilities  for  the 
insurance  company  in  the  conduct  of  the  agency,  but  I  am  certain 
that  the  company  official  could  follow  with  a  lecture  on  "Home 
Office  Management,"  and  amaze  you  with  the  multitudinous 
affairs  necessary  for  the  proper  management  of  the  Home 
Office,  and  yet  leave  all  the  matters  to  which  I  have  here  referred 
in  the  hands  of  the  agency. 

You  may  doubt  as  to  whether  there  are  many  insurance 
agencies  that  perform  all  the  functions  that  this  ideal  organiza- 
tion would,  but  I  can  assure  you  that  there  are  many  such 
agencies  in  successftil  operation,  and  the  successful  agency  of 
tomorrow  will  be  the  agency  that  is  conducted  along  those  lines. 

To  perform  all  these  duties,  however,  it  necessarily  follows 
that  there  must  be  competent  and  methodical  management. 

In  the  first  place,  the  manager  or  management  must  be 
familiar  with  all  details  of  agency  work,  so  that  he  may  be  able 
to  delegate  the  work,  and  be  sure  that  it  is  being  correctly 
handled.  It  is  said  that  the  General  who  has  forgotten  how 
to  mount  guard  is  no  longer  a  capable  general.  So  the  head 
of  an  agency  organization  must  thoroughly  understand  the  work 
he  is  delegating  to  subordinates.  If  there  is  any  position  in 
the  office  he  is  incapable  of  filHng,  he  should  immediately  "go 


114 

to  it"  and  learn  it.  He  must  have  such  a  complete  grasp  of 
details  that  if  there  were  a  strike  on  his  hands,  he  could  per- 
sonally instruct  others  to  replace  the  strikers.  Not  only  must 
he  understand  all  details,  but  he  must  also  be  sure  that  they 
are  being  efficiently  administered.  He  should  know  about 
purchasing  supplies,  and  be  familiar  with  his  finances  and 
accounts.  He  should  be  as  careful  in  executing  a  $500  house- 
hold furniture  poHcy  as  he  would  of  a  $50,000  fidelity  bond. 
He  should  know  whether  the  policy  clerk  is  filling  that  position 
all  right,  or  not,  and  be  able  to  sit  at  the  desk  himself  and  cor- 
rectly write  policies,  forms  and  endorsements.  He  should  know 
as  much,  yes  even  more,  regarding  the  financial  affairs  of  his 
agency,  than  his  cashier;  if  he  does  not,  he  should  swap  jobs 
with  the  cashier  until  he  does.  In  short,  he  should  keep  familiar 
with  all  details  of  his  business,  even  though  he  may  have  to 
sacrifice  time  that  he  would  like  to  spend  on  the  golf  course. 
If  not  he  becomes  a  "has  been"  before  he  knows  it.  It  is  all 
well  enough  to  employ  others  to  do  your  work,  in  fact,  of  course, 
this  has  to  be  done,  but  what  I  am  trying  to  show  is  that  the 
executives  of  the  agency  cannot  afford  to  be  neglectful  but  must 
be  eternally  vigilant,  and  should  know  from  personal  knowledge 
whether  the  affairs  of  the  agency  are  going  right  or  not.  It 
is  the  ambitious  and  capable  man  who  keeps  cognizant  of  all 
details  of  his  business  and  only  through  such  interest  can  thorough 
precision  and  effectiveness  be  adequately  maintained. 

Now  that  we  have  considered  somewhat  the  agency  man- 
agement, let  us  turn  our  attention  to  general  operations. 

The  business  of  insurance,  as  I  have  previously  stated,  is 
essentially  an  agency  business:  its  business  must  be  produced 
and  its  field  work  conducted  by  agency  organization.  It  behooves 
the  companies  therefore  to  encourage  the  agency  in  developing 
itself  into  an  ideal  agency.  So  agency  organizations  have  every 
reason  to  expect,  and  if  not  received  in  full  measure,  have  the 
right  to  ask  for  the  fullest  support  and  cooperation  of  its  prin- 
cipals. On  the  other  hand,  the  companies  have  every  reason 
to  expect  and,  indeed,  have  the  right  to  demand  active  service 
in  the  agency  from  the  ground  up. 

An  agency,  from  the  very  nature  of  its  organization,  cannot 
survive  unless  it  solicits  business,  and  this  is  of  paramount 
importance.  The  agent,  who  hesitates,  and  does  not  solicit 
a  possible  prospect,  or  who  is  afraid  of  his  dignity  (false  pride 
is  perhaps  a  better  term)  to  measure  up  a  plate  glass  risk  on 
Main  street,  or  to  solicit  his  neighbor  or  friend  or  stranger  for 
insurance,  or  has  no  systematic  plan  of  soliciting  new  business 
continuously,  is  the  agent  or  agency  that  has  deteriorated  and 
lost  its  grip.  Dignify  your  business  by  maintaining  activity 
in  all  lines,  soliciting  in  particular,  since  by  doing  this  earnestly 
and  comprehensively  success  is  certain,  and  you  dignify  your- 
self and  your  business. 


115 

Soliciting  business  may  be  conducted  in  many  ways,  too 
numerous  to  mention,  but  it  is  the  source  of  prosperity  of  the 
agency  and  is  responsible  for  all  the  activities  of  the  office 
which  follow.  Its  first  effects  are  seen  in  the  policy  writing  de- 
partment, which  must  be  equipped  with  all  the  necessary  and 
latest  policy  forms,  then  as  the  policies  are  written  the  daily 
reports  go  to  the  mapping  department  and  the  office  record 
goes  to  the  accounting  department,  then  the  bookkeeper  must 
get  busy  with  the  collection  of  premiums,  a  matter  that  in  an 
agency  office  is  second  in  importance  only  to  the  securing  of 
business. 

I  remember,  it  seems  years  and  years  ago,  attending  a  play 
in  which  that  famous  actor,  the  late  Sol  Smith  Russell  took  the 
leading  role.  He  said  in  part:  "Once  I  had  a  friend,  and  I  had 
some  money.  I  loaned  my  money  to  my  friend  and  now  I 
have  no  money  and  I  have  no  friend."  An  established  maxim 
is:  "Short  credits  make  long  friendships."  This  ought  to  be 
all  that  is  necessary  to  say  on  the  subject  of  collections.  An 
agency  does  not  •  need  much  experience  in  the  business  before 
it  discovers  that  it  is  absolutely  necessary  to  conduct  the  business 
along  the  lines  of  limited  credit  and  close  collections,  and  unless 
the  business  is  so  conducted  you  are  liable  to  find  yourself  out 
of  business  before  you  have  had  an  opportunity  to  test  all  the 
rules  and  theories  of  the  insurance  business  that  you  have  gath- 
ered together  and  absorbed  from  your  Insurance  Institute 
courses.  If  you  are  going  to  continue  in  the  business  and  make 
a  success  of  it,  it  is  imperative  that  you  collect  your  bills  promptly 
and  pay  your  companies  without  fail  when  your  accounts  are  due. 
The  first  experience  in  outside  work,  of  the  rising  young  man, 
the  future  underwriter  of  the  business,  is  very  often  confined 
to  delivering  policies  and  collecting  bills,  important  work  which 
cannot  be  handled  by  an  office  boy  since  it  brings  together  in 
direct  personal  contact  your  representative  and  your  client. 
I  have  no  fear  for  the  future  success  of  the  young  man  who  can 
handle  these  two  matters  successfully  and  tactfully.  Work 
along  these  lines  developes  the  young  man  and  leads  to  promo- 
tion. He  has  opportunities  to  solicit  business,  make  friends, 
and  gain  more  knowledge  of  the  business;  he  advises  with 
prospective  clients;  he  observes  conditions  and  reports  on  same, 
and  before  he  knows  it  he  is  inspecting  business,  and  as  he  is 
an  ambitious  and  inquisitive  and  withal  energetic  young  man, 
he  soon  discovers  that  the  greatest  rewards  are  won  by  the 
business  getters.  He  studies  the  agents'  manual  of  rates  and 
forms;  he  gets  interested  in  the  work  of  Underwriters'  Asso- 
ciations, becomes  familiar  with  inspection  bureaus  and  the 
functions  of  local  boards.  Later  he  finds  himself  capable  of 
advising  clients  or  prospective  cHents  as  to  the  value  of  the 
installation  of  fire  prevention  facilities  and  of  proper  construction. 


116 

Later,  as  he  is  a  young  man  intent  on  knowing  the  business 
in  all  its  details  as  regards  agency  work,  you  will  find  him 
adjusting  losses  and  doing  the  work  so  well  that  he  makes  the 
"man  higher  up"  feel  like  an  old  timer.  In  this  way,  his  logical 
landing  place  is  close  to  the  head  and  he  becomes  the  right  hand 
man  of  the  executive.  That  is  a  fine  and  enthusiastic  picture 
I  have  drawn  of  the  young  man,  and,  moreover,  one  true  to 
life,  for  I  have  witnessed  such  results  many  times. 

I  must  hurry  along.  I  am  afraid  that  I  have  almost  exhausted 
my  time  allowance,  but  there  are  only  one  or  two  more  matters 
that  I  want  to  mention.  I  cannot  neglect  this  opportunity 
of  bearing  witness  and  acknowledging  before  this  gathering 
composed  mostly  of  young  men  who  are  intent  on  perfecting 
themselves  in  their  chosen  profession  or  business,  that  the 
business  of  insurance  is  a  dignified  business,  so  dignified,  in 
fact,  that  it  has  been  termed  by  some  a  profession,  although 
this  does  not  in  my  opinion  dignify  it  any  more  than  classified 
in  its  right  place  as  a  business,  which  attracts  to  it  the  dignified 
and  capable  man.  It  is  a  business  of  larger  affairs  and  carried 
and  developed  along  proper  lines  is  remunerative.  As  the 
progress  and  development  of  this  great  business  of  insurance, 
so  vitally  necessary  to  the  prosperity  of  our  national  business 
life,  is  affected  to  the  very  highest  degree  by  the  army  of  agents 
and  agency  organizations,  covering,  as  they  do,  the  entire  country 
and  grouped  in  various  boards  and  associations,  the  maximum 
of  effort  should  be  exerted  at  all  times  by  all  engaged  in  the 
business,  either  individually  or  collectively,  through  their 
trade  organizations,  or  through  whatever  legitimate  means 
there  may  be  in  their  power  to  direct,  to  encourage,  to  build 
up  and  increase  the  high  moral  and  business  calibre,  the  fra- 
ternity so  well  enjoys  today.  This  should  be  one  of  the  unquali- 
fied obligations  of  each  and  every  agent  and  agency  organiza- 
tion in  the  business. 

The  insurance  press  is  one  of  the  most  important  factors 
that  well  support  the  highest  ideals  of  the  business,  reflecting 
as  it  does  the  thought,  practice  and  progress  of  the  companies 
and  agencies,  and  I  believe  it  is  impossible  for  an  agent  or  agency 
organization  to  make  a  better  investment  than,  either  by  sub- 
subscribing  to  or  advertising  in  or  both,  to  help  support  our  more 
representative  publications.  Indeed,  it  is  almost  a  duty  to 
do  so,  and  no  agent  or  agency  organization  can  keep  abreast 
of  the  times  unless  their  trade  papers  are  regularly  received 
and  read. 

In  conclusion,  I  wish  especially  to  emphasize  the  truth 
that  no  more  honorable,  active  field  of  endeavor  in  the  business 
world  exists  than  that  of  insurance  in  all  its  branches,  and  no 
field  with  such  unbounded  opportunities  or  greater  reward, 
if  you  distinguish  yourself  by  abiHty  and  fidelity. 


117 

The  business  combines  continuous  study  with  most  active 
practice.  It  keeps  men  young,  inasmuch  as  it  keeps  them  active 
in  the  heat  of  the  fray  of  business  Hfe.  Opportunities  fairly 
beckon  for  the  expansion  of  your  business  life  and  boradening 
of  your  attitude  toward  your  fellow  man,  which  all  results 
in  the  development  of  your  own  character,  and  incidentally 
the  reward  for  the  fulfillment  thereof,  which  brings  you  to 
the  goal  of  ambition.  I  would  also  leave  with  you  a  thought 
that  whether  you  will  be  interested  or  are  now  interested  in 
the  agency  organization  from  my  point  of  view,  or  the  company's 
point  of  view,  that  you  will  add  your  assistance  to  influence 
officials  of  the  companies  to  recognize  more  the  value  of  well 
organized  agencies  and  use  every  effort  to  develop  them  to  a 
state  of  efficiency  fully  equal  to  home  office  management,  for 
by  so  doing  they  are  performing  as  valuable  a  service  to  their 
companies  as  it  is  possible  to  render. 

I  cannot  bring  my  remarks  to  a  close  without  expressing 
appreciation  of  the  honor  you  have  conferred  upon  me  in  so 
cordially  inviting  me  to  address  you,  and  to  wish  continued 
strength  to  the  good  work  to  which  your  Institute  is  committed, 
with  the  hope  that  many  of  you  in  due  time,  if  you  are  so  in- 
clined, may  personally  witness  successful  and  practical  demon- 
stration of  the  schooling  received  through  the  medium  of  the 
Institute. 


\ 


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